Will Tesla stock surge with the launch of the Robotaxi?
With the emergence of autonomous vehicles, the automotive industry is on the brink of a revolution, and Tesla is at the forefront of this technological wave. Following the recent unveiling of its self-driving taxi project and Cybercab, investors worldwide, including those in Australia, are eager to understand the potential impact on Tesla's stock price.
In this article, we will delve into the potential impact of Tesla robotaxi on stock prices, explore the market potential of autonomous taxis, and discuss the challenges and prospects of this technology.
What a Trump win means for Tesla stock?
Edward Lees says Trump's win could make Elon Musk's pivotal role between the tech world and Washington more prominent. While Trump had been critical of the Biden administration's electric car policy, he has softened his stance with Musk's support, even occasionally praising electric cars. This change hints at a more relaxed regulatory environment that Tesla and other companies may face in the future. In addition, Musk has said that Tesla will soon launch Robotaxi and plans to leverage its ties to the Trump administration to push for a "federal self-driving vehicle approval process."
Meanwhile, Trump's win is seen as one of the factors favoring Tesla's stock price. Markets expect his return to help Tesla benefit from it, and Tesla stocks have soared as investors have become bullish on the company's prospects. Investors believe that reduced subsidies for electric cars and renewable energy during Trump's administration will undermine the competitiveness of smaller rivals and give Tesla an even greater advantage.
How do Tesla's major product launches impact stock prices?
Tesla has a history of influencing its stock price through product launches. Over the past four months, Tesla's stock price has risen by more than 43%. Despite future challenges, investors are closely monitoring this event for breakthrough opportunities.
1. Model S
The Model S, as Tesla's first mass-produced vehicle, marked the transition of Tesla from a startup to a mature car manufacturer. It consolidated Tesla's leadership position in the electric vehicle market and significantly enhanced its brand image and market reputation by showcasing its innovative technology, exceptional performance, and luxurious design. The successful launch of this product and its subsequent strong sales performance strengthened investors' confidence in Tesla's future growth potential, thus positively impacting the stock price and promoting a revaluation of its value in the capital market.
2. Model 3
The launch of the Tesla Model 3 marked the company's expansion into the mass market, enhancing market potential and growth prospects. The Model 3 sparked market interest with its affordable price and excellent performance, leading to a surge in pre-orders and demonstrating Tesla's large-scale production capabilities, which strengthened investors' confidence in the company. Despite challenges in production and delivery, such as bottlenecks and delays, causing short-term stock price fluctuations, the successful launch and market acceptance of the Model 3 solidified Tesla's leadership position in the electric vehicle industry, laying the foundation for its long-term stock price growth.
3. Model Y
The Model Y is considered one of the most commercially successful products in Tesla's history, with a significant dominance in the new energy market and becoming one of the world's best-selling models. The success of the Model Y not only changed Tesla's brand image, making it more accessible, but also significantly improved the company's gross margin, thereby strengthening investors' confidence in the company's ability to achieve economies of scale and sustained growth. This had a significant positive impact on its stock price, driving the growth of the company's market value.
4. Cybertruck
After the launch of the Cybertruck, Tesla's stock price fell. This indicates that the market has doubts about this new product and its future commercialisation process. Elon Musk himself also stated that the Cybertruck would need 12 to 18 months to become a significant contributor to cash flow, further indicating that the Cybertruck may not have a significant positive impact on Tesla's financial situation in the short term. In the long run, the successful launch and market acceptance of the Cybertruck have solidified Tesla's leadership position in the electric vehicle industry and laid a solid foundation for its long-term stock price growth.
5. Cybercab
The launch of the Tesla Cybercab marks an important step for the company in the field of autonomous taxis. This innovative product has attracted great market attention with its disruptive design and advanced autonomous driving technology, strengthening investors' confidence in Tesla's long-term growth potential in the field of autonomous driving.
However, on October 10, 2024, the day of the Cybercab launch, it failed to impress investors, leading to a significant drop in stock price during pre-market trading. Commercialisation faces challenges such as regulation, technology, market acceptance, and infrastructure, which may limit short-term stock price increases. Therefore, the impact of the Cybercab on the stock price is complex and depends on the market's overall expectations for the product's future prospects and its tolerance for potential challenges.
What is the Robotaxi?
Autonomous taxi (Robotaxi) is the application of autonomous driving technology in the taxi industry, allowing vehicles to transport passengers without the need for a human driver. Launching this service is expected to greatly reduce the cost of taking a taxi and may trigger a new round of competition in the shared mobility sector.
Robotaxi has the potential to transform the transportation industry by integrating key technologies and manufacturing processes. Within the domain of automotive technology, the principal entities are the providers of vehicle components. Their production efforts are geared towards the development of critical hardware for smart driving systems, including semiconductors and operational controls, alongside the software that enriches the overall driving and passenger experience.
Technical foundation: Robotaxi relies on advanced autonomous driving technology, typically at Level 4 or Level 5, which means the vehicle can achieve full self-driving in most environments and conditions. Tesla's Robotaxi plan is based on its Full Self-Driving (FSD) technology, which uses cameras, sensors, and a powerful computing platform to achieve the vehicle's autonomous navigation.
Product features: Taking Tesla's Cybercab as an example, it is a futuristically designed autonomous taxi that has no steering wheel and pedals, relying entirely on autonomous driving technology. This vehicle is expected to adopt inductive charging technology and is priced at less than $30,000, a strategy aimed at attracting more consumers to experience the convenience of autonomous taxis. The design concept of Cybercab removes traditional control devices, showcasing the vision of full self-driving, and its streamlined body and coupe shape herald a new trend in future automotive design.
How to invest in Tesla Stock on Moomoo?
Australian investors can trade Tesla stock on moomoo, and you can do so by following these steps:
Open an account: First, you need to register an account on the moomoo platform. Moomoo offers a quick and easy online account opening experience, and you can register on the official website.
Deposit: After opening an account, you need to transfer funds to your moomoo account. You can do this by connecting your bank account. Moomoo supports a variety of deposit methods, including ACH transfers and wire transfers, which are free.
Choose a stock: On the moomoo trading platform, you can use the search function to find Tesla stock. Moomoo provides real-time quotes from multiple markets around the world, including the Australian stock market and the US stock market.
Place an order: After finding Tesla stock, you can choose to buy it based on real-time quotes and your investment decision. You can set different types of orders, such as limit orders or market orders. moomoo provides an intuitive trading interface that allows you to place orders easily.
Monitor your investment: After purchasing Tesla stock, you can monitor your investment performance on the moomoo platform and get real-time market news and stock information.
Influence of Robotaxis' launch
Tesla's introduction of the Cybercab Robotaxi signifies a significant step forward for the automotive industry in the realm of intelligent transportation. This innovation not only demonstrates Tesla's ambition in autonomous driving technology but also has the potential to catalyse a new wave of technological revolution in the automotive sector. In Elon Musk's envisioned future, autonomous vehicles like the Tesla Robotaxi will significantly reduce traffic fatalities and transform cars into a "comfortable lounge" where passengers can relax or work.
Market impact: The launch of the Robotaxi could disrupt the entire automotive industry's rules of engagement. It may spark new competition in the shared mobility sector and potentially lead to a decrease in private car ownership rates. For instance, Tesla plans to expand its Cybercab fleet to 7 million vehicles, with future potential to reach between 10 million to 20 million units.
Regulatory challenges: The widespread adoption of autonomous taxi services faces dual challenges of regulation and technology. Currently, driverless vehicles are not allowed on the road without restrictions and must be tested within specified parameters, often with the oversight of a safety operator. For example, Tesla has faced government pressure over autonomous driving accidents, leading to the recall of millions of vehicles equipped with the Autopilot system for remote software updates. The issue of liability for autonomous vehicles remains unresolved, and the development of Robotaxis may require deployment and testing permits, which can also be revoked.
Future outlook: Despite Tesla's ambitious Robotaxi plans, they also face significant risks and uncertainties. The success of this service depends on the rapid development of new technologies, consumer support, non-existent regulations, and whether Autopilot and FSD can withstand legal challenges and federal criminal investigations. The global commercialization process of Robotaxis has reached a critical juncture, with governments around the world further relaxing their attitudes towards Robotaxis and providing clearer policy directions.
Overall, the Robotaxi represents the application of autonomous driving technology in the taxi industry and has the potential to completely change our modes of transportation. However, it also faces challenges in technology, market acceptance, economics, and regulation. Tesla needs to achieve breakthroughs in these areas to realize its commercial vision for the robotaxi.
Will Robotaxis lead to a surge in Tesla stock?
Tesla's launch of its Tesla Robotaxi service, while marking a significant phase in the company's development, does not guarantee an immediate surge in stock prices. The market's reaction is likely to be influenced by a variety of factors, such as the maturity of the technology, regulatory approvals, and the actual timing of commercialisation. Although this event did not reveal many details, it did showcase Musk's grand vision for the future of Tesla Robotaxi, rather than Tesla's short-term profit opportunities. Therefore, investors should exercise caution when investing, focusing more on its long-term potential rather than expecting a significant increase in stock prices in the short term.
Musk views the autonomous taxi (Robotaxi) as an innovative combination of the sharing economy and autonomous driving technology. Tesla owners will have the opportunity to add their vehicles to the autonomous taxi network, thereby generating additional income. Musk likens this model to the "fusion of Airbnb and Uber." This strategy not only creates new profit channels for Tesla but also has the potential to reshape the existing ride-hailing market landscape.
RBC Capital Markets forecasts that by 2040, the global autonomous taxi market will be able to generate revenues of up to $1.7 trillion. Musk further stated that Tesla's autonomous taxi business could increase the company's valuation from $770 billion to $5 trillion.
ARK Investment Management predicts that by 2029, about 90% of Tesla's value and revenue will come from its autonomous taxi service. At the same time, electric vehicles are expected to account for about 25% of total sales, contributing about 10% to Tesla's revenue, but the profit margin of the autonomous taxi business is expected to be significantly higher than that of electric vehicle sales. The following chart shows the distribution of revenue, EBITDA, and enterprise value across different business lines.
In addition, after Trump won the US election, Tesla stock also ushered in a new round of price growth, with the highest increase of more than 14%. Dan Ives says a second Trump presidency would be a huge positive for Tesla stock.
Final thoughts on Robotaxis' impact on Tesla stock
The Tesla Robotaxi market holds immense potential for significant growth for Tesla in the long run, in the short term, stock price fluctuations may be influenced by more immediate factors.
Therefore, investors in Australia should consider these factors holistically when making investment decisions, maintaining confidence in Tesla's long-term potential while exercising caution regarding short-term stock price volatility. As the development of autonomous driving technology and market conditions evolve, the future for Tesla and its investors remains one of boundless possibilities.