Akin to a tongue-in-cheek iteration of "he loves me, he loves me not," Tesla's near-term narrative is currently being dominated by the following speculative reverie: "Will there be a Model 2, or will there not?"
Reuters published a highly contentious report in early April, disclosing Tesla's apparent willingness to abandon its upcoming cheaper Model 2 in the face of serious competition from China. While Elon Musk quickly clamped down on the veracity of Reuters' reporting, this did not stop educated conjecture as to the fate of the $30,000 Model 2. The same day, in an apparent attempt to halt Tesla's share price slide, Musk announced that the EV giant's much-delayed robotaxi will be unveiled on the 08th of August, 2024, with the vehicle expected to leverage the same platform as that of the Model 2.
This brings us to the crux of the matter. There appears to be a growing chorus at Wall Street that the robotaxi is a 2030 story, lacking any immediate financial implications. As we noted in a previous post, Bernstein analysts have already termed the robotaxi an "aspirational" move for now.
$TSLA | Wedbush's Dan Ives thinks the FOCUS should be on the Tesla MODEL 2 rather than the ROBOTAXI.
If Robotaxis is viewed as the "magic model" replace to Model 2 we would view this as a DEBACLE NEGATIVE for the Tesla story.
"Robotaxi is NOT the near-term answer to fill this… pic.twitter.com/Z0lfORxG41
— Wall St Engine (@wallstengine) April 12, 2024
Today, Wedbush's Dan Ives has joined this growing chorus, noting that if the robotaxi were to replace the Model 2 as Tesla's panacea of sorts, it would be a "debacle negative" for the Tesla story.
According to Ives, around 60 percent of Tesla's growth in the next few years will be sourced from the Model 2, as the sub-$30,000 price point drives another leg of EV mass adoption cycle.
In contrast, Wedbush does not expect truly autonomous vehicles before 2030. Of course, this timeline makes sense, given the plethora of regulatory and legal hurdles in the path of autonomous mobility.
MORGAN STANLEY: “.. We had (mistakenly) expected $TSLA to formally launch a highly automated ride-share service back in 2018. Nearly a decade later, we’re still waiting. August 8th will offer some important clues. .. we believe the more material commercial scaling of the business… pic.twitter.com/i0zzOj7oCO
— Carl Quintanilla (@carlquintanilla) April 9, 2024
Interestingly, Wedbush's view on robotaxis mirrors that of Morgan Stanley's, whose analysts expect material commercial scaling of this revenue stream only after 2030 and beyond.
While today’s hot CPI print is hurting $TSLA and other long duration names, TSLA continues to recover from last week’s Reuters rumor that the $25K TSLA compact would be canceled or significantly delayed. TSLA is now a tug-of-war between declining fundamentals (FY’24 EPS ests… pic.twitter.com/8D215yRWtD
— Gary Black (@garyblack00) April 10, 2024
Of course, analysts are now looking toward Tesla's earnings call on the 23rd of April to gain further clarity vis-a-vis the fate of the Model 2.
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