Account Info
Log Out
English
Back
Log in to access Online Inquiry
Back to the Top
Tesla's "Cybercab" global debut sends stock falling
Views 1.4M Contents 537

Tesla's Robotaxi: A Game Changer or Just Hype?

avatar
Analysts Notebook joined discussion · Oct 9 19:42
Tesla is set to unveil its much-anticipated Robotaxi this Thursday, marking a major step toward self-driving technology. CEO Elon Musk is expected to showcase the "Cybercab" prototype and outline the business model, production plans, and timelines.
With Tesla's stock rising over 43% in the past four months, investors are closely watching this event for potential breakthroughs despite the challenges still ahead. In the past, Tesla's big product launches have often led to significant stock price changes.
Tesla's Robotaxi: A Game Changer or Just Hype?
The Robotaxi has the potential to transform the transportation industry by integrating essential technologies and the manufacturing process. Key players in this technology field include automotive parts suppliers. For manufacturing, the focus is on hardware necessary for smart driving - such as chips and control systems - along with software for both driving and passenger experience.
A Revolutionary Business Model
Musk envisions Robotaxi as a groundbreaking fusion of the shared economy and autonomous driving. Tesla owners could add their vehicles to a fleet of autonomous taxis, generating income - a model Musk describes as combining"Airbnb and Uber" This strategy opens up a new revenue stream for Tesla while potentially transforming the ride-hailing industry.
RBC Capital Markets estimates that the global Robotaxi market could generate $1.7 trillion in revenue by 2040. Musk explained that Tesla's Robotaxi division could fuel its valuation from $770 billion to as much as $5 trillion.
Also, ARK expects that by 2029, around 90% ofTesla'ss value and earnings will come from its robotaxi business. Meanwhile, electric vehicles are expected to make up about 25% of total sales and contribute around 10% toTesla'ss earnings, but the robotaxi business will have much higher profit margins. The charts below show how revenue, EBITDA, and enterprise value are divided by each business line.
Source: ARK
Source: ARK
Beyond autonomous driving, Tesla's Robotaxi project has broader implications for urban mobility. Statista projects that the global ride-sharing market, valued at $180 billion in 2021, will grow to $400 billion by 2027. As transportation becomes smarter and more efficient, Tesla could play a central role in shaping the future of mobility.
However, this model's success hinges on several factors, including the reliability of Tesla's self-driving technology, consumer adoption, and regulatory approval. While Tesla has advanced its software, the real test will be its performance in real-world conditions.
Challenges And Opportunities
Tesla's reliance on cameras and AI, instead of the more expensive radar and LiDAR systems, is a calculated decision to lower costs. Market research firm CB Insights reports that autonomous driving research costs billions, but Tesla has sought to streamline its approach by focusing on optimizing its existing camera-based systems.
However, this cost-effective approach has raised safety concerns. Tesla's Full Self-Driving (FSD) technology must prove itself capable of handling unpredictable driving conditions safely and efficiently. Investors and analysts are keen to see whether Tesla can deliver a system that functions reliably without human intervention.
Tesla also faces stiff competition. Waymo, Alphabet's autonomous vehicle division, has already launched a paid driverless taxi service in parts of the U.S., while General Motors' Cruise and Amazon's Zoox are also making significant progress.
Besides, Baidu is said to be planning to expand its robotaxi service, Apollo Go, into international markets, as Baidu's robotaxi service has been making progress in its home market. In August, Goldman Sachs analyst Lincoln Kong pointed out that the unit is nearing scalable adoption and is approaching breakeven regarding unit economics. Tesla's ability to distinguish its offering will be crucial in this competitive space.
Regulatory Risks
The regulatory landscape for autonomous driving is complex. Tesla's FSD technology has faced scrutiny following several fatal crashes, leading to heightened concerns about safety. McKinsey reports that more than 40 countries are developing regulations for autonomous vehicles, and Tesla must navigate these diverse legal environments.
To secure approval, Tesla must provide clear evidence that its system is safer than human drivers, which will require extensive data and real-world validation. This regulatory challenge and public skepticism add layers of difficulty to rolling out a widespread autonomous driving service.
Regional differences in regulatory frameworks also complicate Tesla's global expansion. In some markets, approvals may come swiftly; in others, the process could be more restrictive, slowing the company's plans.
Expectations
Despite the buzz surrounding Tesla's Robotaxi launch, some analysts are cautious. CFRA analyst Garrett Nelson has warned of a possible "sell the news" reaction, noting skepticism over Musk's optimistic timelines. Tesla has a history of overpromising and underdelivering on certain technological advancements, which could dampen market enthusiasm post-event.
However, Wedbush analyst Dan Ives takes a more bullish view, predicting the event could showcase transformative autonomous driving capabilities. Analysts remain divided, with 9 out of 19 issuing a "buy" rating, seven recommending "hold," and three advising "sell." The average price target is $220.44, reflecting mixed sentiments on Tesla's near-term prospects.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
161
7
16
8
3
1
1
+0
119
Translate
Report
72K Views
Comment
Sign in to post a comment

View more comments...