Anticipation Builds for Tesla's Robotaxi Event

Significance of the Event

The much-anticipated Robotaxi event by Tesla, titled “We, Robot,” is scheduled to happen live from Warner Bros. Discovery Studios in Hollywood, Los Angeles. The event, which will be livestreamed on Tesla’s social media platforms, is set to start at 7 p.m. on October 10. Rumors suggest that the event will showcase prototypes of Tesla’s upcoming autonomous vehicle, which has been seen around the studio grounds and key locations in San Francisco and LA. Tesla has been gathering Full Self-Driving (FSD) data in these areas, sparking speculation about new developments such as Robotaxi sanitization and wireless EV charging. Invitations were sent to winners of a shareholder raffle, with tickets arriving just days before the event. The invitation stated, "Join us for We, Robot — our official unveiling of the future of autonomy." Dan Ives from Wedbush has said of the event: “We believe this is a pivotal time for Tesla as the company prepares to release its years of Robotaxi R&D shadowed behind the curtains, while Musk & Co. lay out the company’s vision for the future." Some enthusiasts are calling it "the most important Tesla event ever."

Expectations for the Cybercab

NotTeslaApp predicts that Tesla will deliver a small, two-door sedan with two seats. The car is expected to have four wheels, although there was some speculation of three wheels at one point. They suggest that it will likely include a good amount of trunk space for luggage as well. Tesla's Robotaxi is expected to be smaller than current models, resembling a compact version of the Model 3 with a simplified interior focused on autonomy and low-cost production. It will likely feature a single central screen like the Model 3, but with a stripped-down UI displaying key information such as ETA and fare price. While Tesla may not reveal much about FSD hardware, the Robotaxi will probably include the upcoming Hardware 5 FSD suite or new hardware designed for redundancy and safety, essential for autonomous fleet operations. According to Electrek, the robotaxi is rumored to be “Cybertruck-like” in design, without a steering wheel or pedals, and potentially smaller in size. A prototype was spotted testing at the Warner Bros. lot. Tesla may also showcase its latest Optimus humanoid robots with a focus on autonomous features.

Insights on the Prototype

Gene Munster with Deepwater Asset Management tells MarketWatch he expects "at least a robotaxi prototype, and talk of a 'Model 2' cheaper EV". Adam Jonas from Morgan Stanley wrote last month that a demonstration of the latest iteration of FSD [full self-driving] software and a demonstration of a fully autonomous 'cybercab' in a closed or semi-closed course is likely to be on display. He believes the robotaxi will come from the preexisting fleet of Tesla vehicles already on the road: While the cybercab — a vehicle envisioned as one without a steering wheel or pedals — may be the natural fit for a robotaxi, Jonas believes it is the preexisting fleet of Teslas out on the road that, when combined with FSD and Tesla’s upcoming rideshare mobility app, will allow owners of those Tesla EVs to put those vehicles on Tesla’s rideshare service. The true game changer would be unlocking the potential of those vehicles, he said.

Expectations for Release Timeline and Final Product

Expectations for a final or near-final working product seem low. "Few observers, if any, expect a fully functioning product," Reuters wrote. "We believe the robotaxi event will be long on vision, and short on immediate deliverables or incremental revenue drivers," Bernstein analyst Toni Sacconaghi said. Tesla executives will need to “reinforce to consumers and investors that they continue to be innovators,” Gene Munster with Deepwater Asset Management told MarketWatch. “The bar on the robotaxi is is pretty high, but the rest of the stuff is pretty easy, they don’t need to roll a vehicle out there. They can just talk about it,” he added.

Impact on Tesla Stock Price

As far as impact on the stock price, Elliot Johnson, chief investment officer at Evolve ETFs, which manages investments in Tesla, told Reuters: "They need to get going because this has been sort of discussed, rumored, talked about and announced in various forms for a while." He says nothing announced this week will have a financial impact for one to two years. Barron's has also speculated that the event could be a "sell the news" event. Columnist Al Root wrote that "Robotaxi Day may be Elon Musk’s last chance to convince investors that Tesla still has it". Edison Yu has been telling his clients to be “tactically cautious” with the stock.

Reaction by Other Autonomous Driving Companies

Elsewhere in autonomous driving, Investing.com did a good job laying out what competitors and the rest of the industry may be watching. The U.S. rideshare market, currently just 1% of total miles driven, could expand significantly with the introduction of autonomous vehicles (AVs), according to Morgan Stanley. While Tesla’s technological advancements may drive faster AV adoption, the transition faces challenges in scaling and regulation. Tesla's potential to launch a Level 4 (L4) autonomous service could yield a 41% cost advantage over Uber and Lyft, and 21% over Waymo, thanks to its camera-based approach versus Waymo's sensor-heavy system. Market trends in cities like Austin and Phoenix will indicate whether AVs can integrate effectively with rideshare platforms, a key concern for Uber's hybrid model strategy.

Bottom Line

The Tesla Robotaxi event is certainly a pivotal moment for the company, and potentially the autonomous vehicle industry as a whole. As we await the unveiling of the future of autonomy, it's important to remember that the journey to full self-driving technology is filled with challenges and uncertainties. However, the potential benefits and advancements are undeniably exciting. What are your thoughts on this upcoming event? Do you believe Tesla's Robotaxi will revolutionize the transportation industry? Feel free to share this article with your friends and discuss. Remember, you can sign up for the Daily Briefing, which is delivered every day at 6 pm.