Tesla Event: Lots of Show, Little Substance – Analysts Express Skepticism

After Tesla's recent "We, Robot" robotaxi event, investors looked to the future with more questions than answers. CEO Elon Musk presented a fully autonomous "Cybercab" in a Hollywood-style setting, borrowing stylistic elements from Tesla's Cybertruck. The market launch for the innovative vehicle is planned for 2026, with a price expected to be around $30,000. Also showcased was an autonomous Robovan designed for transporting cargo or up to 20 people. Despite the romantic 1950s backdrop and Tesla-specific movie posters, the enthusiasm from the financial world remained subdued. While fans had the opportunity to test the new vehicle and enjoy drinks served by Tesla's Optimus robot, investors and analysts were less impressed. Tesla's stock fell by over 7 percent on Friday. Renowned Tesla critic Toni Sacconaghi from Bernstein called the event disappointing, particularly due to the lack of details. There was no concrete information provided regarding regulatory approvals, FSD (Full Self-Driving) compatibility with Tesla’s existing EV fleet, or safety precautions. Sacconaghi also expressed doubts about Tesla's ability to surpass competitors like Waymo and Cruise in terms of regulation and technology. The absence of information or even a presentation of the future Tesla model, which is expected to cost less than $30,000 and is known as Model 2, was also a disappointment. Following the event, Bernstein maintained its "Underperform" rating with a price target of $120. Adam Jonas from Morgan Stanley, a steadfast supporter of Tesla, was also disappointed. He had expected more substantial insights, particularly into technological aspects such as sensors, range, and safety features of the Cybercab. Nonetheless, Jonas reaffirmed his "Overweight" rating with a price target of $310, though he acknowledged the stock would be under pressure. However, not all analysts were dissatisfied. John Murphy from Bank of America found the event impressive and saw it as meeting expectations. He highlighted the announced target dates for Cybercab production and the potential starting price point positively. He was also impressed by the demonstration of the Optimus robot. Murphy emphasized the importance of AI and robotics as future development fields for Tesla and praised the announcement that the Cybercab will feature distributed computing power and that Tesla is developing its own microchip, the A5, to control both the Cybercab and Optimus. Despite the current decline, Tesla's stock has already fallen 11% this year, while the S&P 500 has gained nearly 22%. Tesla's next opportunity to align with the benchmark index will be the announcement of the quarterly results on October 23.