Tesla stock price declined sharply in the premarket session on Friday on the heels of the October 10 Robotaxi unveiling. The stock was down by 6.7 percent at the time of writing, signaling a potential extended decline once the market opens. Tesla (NASDAQ: TSLA) has an eventful month, with quarterly deliveries release and the robotaxi unveiling set to pave way for the quarterly earnings release on October 23.
The decline in the Tesla stock price is likely a reflection of investors managing their expectations ahead of the earnings announcement. Tesla’s delivery numbers have taken a hit this year, and that will likely reflect in the earnings report. However, it is hard to argue against the robotaxi launch.
At the event (officially titled “We, Robot”) held at the Warner Bros Studios in Los Angeles, Tesla CEO Elon Musk, dressed in a leather jacket, drove off in the AI-powered robotaxi aptly named “Cybercab”, whose external appearance gave glimpses of the cybertruck. Also, unsurprisingly, it had no steering wheel or pedals.
Furthermore, it is capable of charging wirelessly, which is a big win. Unlike the cyber truck whose 2019 unveiling infamously had a faux pas moment when its apparently “unbreakable” window broke in the full glare of cameras, the cybercab had everything going well.
In addition, Musk had more tricks in the hat at the event. Not only did he unveil the cybercab, but he also announced that the company was working on a mini-bus version of the robotaxi, the “Robovan”, which will have 20 passenger capacity. Also on show was the Optimus Robot, a humanoid whose unveiling involved serving guests drinks at the event, with a price tag of $20k-$30k. However, the downside to the robotaxi event is that Musk left out many details.
On the economic side, the cybercab makes perfect sense. It is set to cost under $30,000 per unit, and operating it will cost $0.2 per mile- $0.3 to $0.40, including taxes. However, Tesla didn’t reveal whether it would use Full Self Drive (FSD) or a new driverless technology. Also, specs like its driving range, security and safety features did not come out.
Furthermore, Musk did not divulge details of milestones made in obtaining regulatory approvals for its FSD technology.
Perhaps Musk was strategic in holding back this information at this point in time, but it has denied Tesla investors the opportunity to picture the robotaxi’s roadmap and potential growth path. However, much could change in the coming weeks, as the company will likely divulge more details that could influence the Tesla share price.
Another key downside to the unveiling is the long wait before Tesla starts producing the cybercab at a commercial scale. The vehicles won’t become available until 2026, a long wait for many investors. Even then, the timeline could be longer if the company encounters hurdles along the way.
However, like the cybertruck, which finally came out after initial setbacks, Musk has proven both his tendency to be overly optimistic with timelines and his ability to honor his word when it comes to quality.
Tesla stock price pivots at 234.47, and the downside will likely prevail if resistance persists at that level. With the sellers in control, the first support could come at 224.76. However, a stronger bearish momentum could break below that level to test 216.70.
On the upside, the buyers will have the upper hand if the TSLA price breaks above 234.47. In that case, initial resistance will likely be at 241.52, but an extended bullish control could break above that barrier and invalidate the downside narrative. Meanwhile, the stock could rise to test the next resistance at 249.00.
This post was last modified on Oct 11, 2024, 11:01 BST 11:01