Tesla (TSLA, Financial) is set to excite investors with the unveiling of its much-anticipated RoboTaxi. Despite a recent pullback from September highs, shares have surged over 30% since August lows, potentially leading to a "buy the rumor, sell the news" scenario.
- TSLA's full-self-driving technology has faced numerous delays, with tonight's event also postponed, hinting at possible future delays. CEO Elon Musk emphasizes that autonomy is crucial for TSLA's growth and suggests that shareholders sell if they doubt TSLA's ability to achieve it.
- Competition is fierce. Uber (UBER, Financial) has partnered with General Motors' (GM, Financial) Cruise for autonomous vehicles. Additionally, Google's (GOOG, Financial) Waymo and Amazon's (AMZN, Financial) Zoox are vying for a share of the estimated $5 trillion autonomous transport market.
- Regulatory challenges could delay the deployment of driverless vehicles. Musk has noted that regulatory approval is a major hurdle, and any incidents involving RoboTaxis could lead to stricter regulations and further delays.
- TSLA aims for growth amid weak macroeconomic conditions and declining EV demand. Stellantis (STLA, Financial) cut its FY24 guidance due to demand challenges, and Toyota (TM, Financial) postponed North American EV production to 2026 due to slowing sales.
TSLA's reliance on incentives to boost sales has eroded margins, and introducing a new product like the RoboTaxi could strain profitability, especially if delays occur. Even if the event generates excitement, TSLA faces significant challenges ahead.
Additionally, watch NVIDIA (NVDA, Financial) following the unveiling. TSLA uses NVDA's GPUs for its AI technology, with autonomous vehicles operating extensively and relying on NVDA's hardware. The event may reveal order numbers or capital spending on NVDA hardware, potentially boosting NVDA's stock.
