Why This Tesla Bull Feels More Optimistic About Energy Storage Than Robotaxis Or FSD V12

Morgan Stanley analyst Adam Jonas on Thursday reiterated his positive outlook for EV giant Tesla TSLA despite increased earnings pressure and forecasts of increased volatility in the near term.

What Happened: Jonas expects heightened volatility for Tesla stock in the next six months, owing to earnings pressure and the transition from an auto company to an AI and robotics company. The analyst, however, continues to be positive long-term, owing to its increasing compute, energy storage business, and upcoming robotaxi unveiling event.

Tesla recently announced that its cars have driven one billion miles with the help of its full self-driving (FSD) software. Jonas sees this increasing to 400 billion miles per year or over 1 billion miles per day by 2030, offering Tesla a monumental dataset for machine learning and subsequently improving its attempts at autonomous driving.

Tesla’s energy storage segment will give it an edge in growing its AI portfolio over other players relying on the existing power grid infrastructure, he added.

Jonas, however, is not as optimistic about Tesla’s full self-driving (FSD) software or robotaxi.

While the analyst expects robotaxi unveiling day in August to provide some insights into Tesla’s future business model, he noted that it might be difficult to convince most investors of its ability to commercialize robotaxis within a particular timeframe.

As for the company’s full self-driving software, Jonas said that its improvement will be difficult to predict. As an FSD user who deploys it to drive around New York, Jonas said that he does not identify any major improvement in the new version as compared to the old.

“If the system (FSD) truly is a ‘ChatGPT moment’ in safety, we believe Tesla would make every effort to communicate such important information to consumers, regulatory bodies, and the insurance industry, hopefully backed by 3rd party verification,” the analyst wrote in a note.

Tesla Deliveries: Last week, Tesla reported an 8.5% year-on-year decline in first-quarter deliveries with 386,810 vehicles delivered across the world. This is the first time Tesla has reported a drop in quarterly deliveries in about four years since the COVID-19 pandemic in 2020.

The disappointing deliveries weigh heavily on first-quarter results expected to be announced on April 23.

Price Action: Tesla stock closed up 1.65% at $174.6 on Thursday. The stock has dropped nearly 30% year-to-date, according to data from Benzinga Pro.

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