Tesla's Robotaxi Ambitions and the Quest for Affordable EVs

Tesla (TSLA) is set to report its third-quarter results after the market closes on Wednesday, and investors are eagerly awaiting updates on the electric vehicle (EV) maker's long-awaited cheaper EV, robotaxi rollout details, and other initiatives like AI and robotics. The company's shares have dipped approximately 9% since the unveiling of its Cybercab robotaxi at the "We, Robot" event on October 10th, as investors seek clarity on the company's ambitious plans.

Navigating Tesla's Robotaxi and Affordable EV Roadmap

Decoding the Third-Quarter Results

Tesla is expected to report revenue of $25.42 billion for the third quarter, up from $25.05 billion in the previous quarter and $23.40 billion a year ago. The Street anticipates the company to post adjusted earnings per share (EPS) of $0.51, with adjusted net income of $2.06 billion and operating profit of $1.96 billion. However, the company's recent third-quarter delivery numbers, which slightly missed expectations, have already sent the stock lower, underscoring the importance of the upcoming earnings report.

The Cybercab and the Quest for a Cheaper EV

The debut and release of a more affordable EV is widely seen as the key to driving the next phase of EV sales growth, and Tesla's CEO, Elon Musk, has acknowledged this. During the company's Q2 report, Tesla said it remains on track to produce new vehicles, including a cheaper EV, in the first half of next year. Investors and analysts, however, were left wanting more details from the "We, Robot" event on the Cybercab itself, as well as the development of the much-anticipated Model 2, Tesla's sub-$30,000 EV.

Addressing Robotaxi and Autonomous Driving Concerns

The "We, Robot" event was met with some disappointment, as analysts felt Tesla provided limited details on the Cybercab and its autonomous driving capabilities. Bernstein analyst Toni Sacconaghi noted that the event "offered little beyond what [Musk] has articulated repeatedly over the last few years," and expressed concerns about Tesla's ability to leapfrog established competitors in the robotaxi space, such as Waymo and Cruise. Investors will be keen to hear updates on the Cybercab's development, as well as Tesla's progress in its full self-driving (FSD) software and the ongoing NHTSA probe into its self-driving technology.

Optimus Robot and the Future of Tesla's Robotics

While Tesla's Optimus robot was a highlight of the "We, Robot" event, its feature set was limited, and the robots were later found to be controlled by human operators. Musk had claimed that Optimus could become Tesla's best-selling product ever, but investors will be looking for more concrete details and demonstrations of the robot's capabilities during the upcoming earnings call.

Delivering on Promises: The Key to Tesla's Stock Performance

Ultimately, the real driver for Tesla's stock performance will be its ability to deliver on its promises, particularly in terms of auto sales and whether the company can maintain its growth trajectory into 2025. As Wedbush analyst Dan Ives noted, "While autonomous, FSD, and robotics is the future for Tesla, deliveries in the near-term will drive the stock and the Street will be laser focused on 3Q showing a margin/demand inflection point in the Tesla story heading into 2025."