Tesla TSLA CEO Elon Musk on Friday said that the company will unveil its self-driving robotaxi on August 8, following reports that the company has scrapped its plans to make a lower-cost EV priced at around $25,000.
What Happened: “Tesla Robotaxi unveil on 8/8,” Musk wrote on X, formerly Twitter.
Musk’s update came soon after an exclusive report from Reuters which said that the company has canceled its low-cost EV, often nicknamed Model 2, but will continue to make self-driving robotaxis on the same platform. Musk, however, denied the report without stating specific inaccuracies.
Analysts Weigh In: Analysts are in two minds about the matter. Gene Munster, the managing partner at Deepwater Asset Management, is indeed convinced that the Model 2 is on hold and that Tesla will only pursue the robotaxi immediately.
However, Munster is convinced that this is the right move for the company as deploying autonomous vehicles at scale will make it the first in the field, thereby giving it an advantage over rivals.
But production will take time, as per Munster. “While the (unveiling) event is in August, my guess is we see Robotaxi’s on the road in 2027,” he wrote on X.
The Future Fund LLC Managing Partner Gary Black, however, is of the contrary opinion. Focussing on robotaxis and putting the low-cost EV in the backseat would be “very risky,” the analyst said. Expressing doubts about the company’s ability to make self-driving robotaxis, Black said, “…institutions would dump the stock since there would be little growth and high pricing risk until the robotaxi materialized — or not.”
Black is of the opinion that the media report is wrong and that Tesla is likely moving forward with both the low-cost EV and the robotaxi.
ARK Invest Management‘s Tasha Keeney observed the situation and noted that the confusion around Tesla’s autonomous driving efforts might be why several analysts are not factoring it into the company’s price target. Keeney, however, is optimistic about the future of robotaxis and its impact on Tesla’s enterprise value.
Why It Matters: During Tesla’s fourth-quarter earnings call in January, Musk said that the company would start making its low-cost vehicles at its gigafactory in Texas in the second half of 2025. Both the vehicle and its manufacturing system would be “revolutionary,” Musk then said, while adding that the production ramp for the vehicle is likely to be “challenging.”
Musk has been touting both the idea of a lower-cost EV and a robotaxi for years. As per Musk’s biography by Walter Isaacson, Musk previously vetoed the idea of a lower-cost car saying robotaxis would make the former unnecessary. Tesla chief designer Franz von Holzhausen apparently convinced him later to pursue both by demonstrating that both offerings could be built on the same platform.
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Elon Musk, Tesla illustration via Shutterstock.
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