Tesla, Elon Musk's latest bet is on robotaxis: stock market divided

The week closed with a red session (-2.03%), but overall one of anticipation for Tesla, after the half-earthquake eight days ago. Reuters had revealed a halt to the Model 2 project, the car 'for everyone', replaced by the launch of robotaxis, self-driving taxis. The stock, already in serious trouble this year (-30%, it dropped out of Wall Street's Magnificent Seven group), had plunged, immediately losing around 6%. The CEO Elon Musk had denied it in his own way ("Reuters tells lies", he had written on his microblogging platform X), only to confirm hours later that Tesla's robotaxi will be presented on 8 August. In after-hours trading the stock had gained 5.1 per cent.

What's going on? Tesla is capitalised at around $550 billion. It was $890 in mid-July 2023, after a seven-month rally that had seen the value rise from lows equivalent to those of four years earlier (attributable in large part to Musk's takeover of Twitter, now X). But multiples remain at tech company rather than car company levels, 10-20 times the traditional players, despite the slide. On Bloomberg, analysts' consensus on earnings sees a slight decline in 2023 but a robust recovery from 2025 onwards.

'The stock,' explainsGabriel Debach, Italian market analyst at the Toro investment community, 'currently trades below the average target price, which is $195, with a one-year p/e of about 62.3x. Forecasts are complex and influenced by several factors, not least the unpredictable behaviour of Elon Musk. Tesla is valued at high levels, mistakes are not allowed. Of the analysts covering the stock, 15 recommend buying, of which 6 have a strong buy rating, 23 suggest holding the position and 9 recommend selling. This distribution of opinions reflects a mixed view, oscillating between confidence and caution'.

"Patience," according to Dan Ives, analyst at Wedbush, "is starting to run out among investors. Robotaxis are not the short-term answer to closing the growth gap, unlike the Model 2. And the answers will have to come during the 23 April conference call. Musk will have to take the reins quickly to regain confidence in the eyes of the stock market. According to our estimates, about 60 per cent of future growth over the next few years could come from the crucial Model 2. As for robotaxis, we do not expect full autonomous driving, without a steering wheel, before 2030. It would be a big mistake to see it as the 'magic model' to replace Model 2, a choice that could set the stage for a debacle.

A bet on robotaxis 'can be read,' comments Gianluca Di Loreto, Partner and Head of Automotive Bain Italia, 'with a view to strengthening the company's position on the market and its value in the eyes of investors, presenting itself as a technological reality capable of guaranteeing significant growth and higher multiples in the long term. Robotaxis are the next frontier of sharing, as they will enable very significant cost savings due to the ability of a car to always be in the right place, i.e. where the demand is at that given moment. But it will have to be seen whether the surrounding universe, and thus the infrastructure, will support its success. The spread, I believe, will be very partial and will grow very slowly and patchily.