Thursday, Tesla Inc. will hold an event at a Hollywood movie studio to show off its robotaxi technology and ideas. The company hopes that the event will help its struggling stock.
Robotaxi day, which is actually called “We, Robot” after Isaac Asimov’s collection of science fiction short stories called “I, Robot,” will try to answer all the questions about a possible fleet of self-driving Teslas that could run on public transportation.
Tesla TSLA is likely to show at least a prototype of an autonomous car and maybe even a ride-hailing app. The company will also likely talk about its newer, cheaper EV that will be released next year and maybe even do a “wait, there’s more” moment by showing off other future EVs.
The event is a party at its core, not a real investment day. To set the mood, it will begin at 10 p.m. Eastern at the Warner Bros. studio in Burbank, California.
“They will need to reassure customers and investors that they are still innovators,” Gene Munster of Deepwater Asset Management said in an interview.
Munster thinks there will be at least a prototype of the robotaxi and talk of a cheaper EV called “Model 2.2.” He said that talk of a brand-new EV, like a business van, would be the wild card.
They don’t have to roll a car out there because the rest of the stuff is pretty easy. The bar on the robotaxi is pretty high. “They can just talk about it,” the catcher said. He said that the “real substance” would be a plan for the car.
Being able to guess what a Tesla robotaxi would look like will be part of the fun of the day. For Munster, the demo car most likely won’t have a standard steering wheel and will be big enough for four people.
CEO Elon Musk has talked about robotaxis for almost ten years. In 2019, he said that a fleet of a million self-driving Teslas could be on the road as early as 2020.
He said that the robotaxis would make money for Tesla users by letting them rent out EVs that they wouldn’t use otherwise. He also said that it would make money for the company through data mining, autonomous vehicle (AV) capabilities, and other things.
Musk has admitted to being too optimistic about self-driving cars and other things. The most recent time was in July, when he talked to investors after Tesla’s second-quarter reports.
In an interview, Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions LLC, said, “Tesla has a history of overpromising and underdelivering. No matter what date is set for this vehicle, it’s going to be pushed back.”
“We are still thinking about what promises will stand the test of time and what won’t,” he said.
Fiorani said that regulation of a fleet of Tesla robotaxis is likely to be a problem, along with problems in production and an uncertain schedule.
“Most people are afraid that they will do more harm than good,” he said, “at least for now.” “I don’t think the average American likes the idea of a robotaxi, even though the cars will probably be safer and cheaper in the long run.”
Bernstein analyst Toni Sacconaghi, a known Tesla bear, sent Tesla a note earlier this week with a list of 10 questions about the project. At the top of the list were questions about how to get regulatory approval, as well as worries about insurance and privacy.
“In the end, we don’t see Tesla winning in [Full Self-Drive and robotaxi] and making huge profits for a long time,” Sacconaghi wrote. He said that even if Tesla was the first company to make cars fully autonomous, other companies would probably catch up.
“Until then, we still worry that Tesla’s main auto business will have limited growth and margin expansion until the cheaper Model 2 is ramped up, which is not likely to happen until 2027,” the analyst said. Tesla has said that it will add cheaper electric vehicles to its range in the first half of 2019.
“Long on vision, and short on immediate deliverables or incremental revenue drivers,” he said. This could cause people to “sell the news” about the stock.
The S&P 500 index SPX has gone up about 20% this year, while Tesla shares have gone down about 1%.
