Tesla $25k car, not Robotaxi, is bigger influence on stock, analyst says
09/27/2024 03:36 PM
With Tesla Robotaxi unveiling right around the corner, analysts are taking their opportunities to comment on the influence of the vehicle as it relates to the company’s stock.
Many would say the Robotaxi, along with Tesla’s rollout of an eventual Full Self-Driving suite that is fully autonomous, would be the biggest catalyst for the stock.
The operation of a Robotaxi fleet for owners, which would make them money while they sleep, licensing the suite to other automakers, and various other things seem to be an obviously large plus for the stock as a whole.
However, one analyst says that’s not what he’s focused on, and something else is more exciting.
Gary Black of The Future Fund believes the bigger catalyst for Tesla shares is the $25,000 vehicle.
This is because if the company breaks into the affordable compact sector and takes market share from vehicles like the Toyota Corolla (the only car to trail the Model Y on last year’s best-sellers list), Tesla will have better sales, leading to better share prices.
Black explained in an interview with Schwab Network:
“My $270 [price target] just includes a take rate on FSD. I include nothing for Robotaxi. I have a big energy ramp-up over the next ten years and a big services ramp-up. But the auto business is the big chunk of that $270. Look, you can be excited about owning $TSLA, and the most important thing to me is the $25,000 to $30,000 car…This is very reminiscent of 2020, when they introduced the Model Y. The Model Y was a new category…the bears said it was just a big Model 3. That is not true because you get a whole new TAM going into a new category…Once you have a compact, you’re bringing the Tesla brand, and its performance, and its safety record, and all the things people love about Tesla…and you’re putting it in the compact category. They’re going to take a lot of market share by doing that.”
The upcoming $25k-30k car, not the Robotaxi, is the most important piece of the valuation puzzle for Tesla, says @garyblack00, as he explains his $270 price target for the EV stock:
"This is very reminiscent of 2020 when they introduced the Model Y." $TSLA
— Schwab Network (@SchwabNetwork) September 27, 2024
This is an interesting take on the stock, but the breakthrough that Robotaxi and developing a fully autonomous driving suite would be compared to simply offering a new vehicle in a competitive sector does not seem to be an apples-to-apples comparison.
Nobody has a fully autonomous car, so if Tesla were to bring that to market, it would present a number of new opportunities for the stock, which would likely be more than what an affordable sedan would bring.
It does not take away from the hype a $25,000 vehicle could bring for Tesla, however.
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