Tesla robotaxis: Wall Street weighs in on Elon Musk’s latest claim

Tesla (TSLA) stock closed up nearly 5% on Monday as investors bought into CEO Elon Musk’s latest proclamation that Tesla would debut its long-awaited robotaxi on Aug. 8.

Musk’s announcement of Tesla’s Robotaxi after the bell on Friday followed a Reuters report that Tesla had canceled plans to build a long-awaited sub-$30,000 EV, which some have called the Model 2. Reuters said that Tesla would instead focus on a self-driving robotaxi, with Musk responding on X that Reuters was "lying (again),” before returning to the platform later to announce the unveiling of the robotaxi, generally understood to have no steering wheel or pedals. It's still an open question whether Tesla will eventually unveil a low-cost EV.

Despite Monday’s pop in shares, Wall Street analysts are mixed on the announcement.

Deutsche Bank’s Emmanuel Rosner said the robotaxi news was “thesis-changing” on Tesla.

“If the shift away from Model 2 is once again confirmed, the Tesla bull case would then presumably be that in light of solid improvement in its autonomous tech, Tesla has decided to press its unique AI and software advantage through a focus on robotaxi, which few OEMs [original equipment makers] could imitate and that would command more favorable economics,” Rosner said on the bull side of the thesis.

The bear side, however, is that Tesla has given up a “key reason” why many own the stock: the Model 2 as a volume play that would “reaccelerate volume, margins, and FCF [free cash flow],” Rosner said. It would also mean the bull thesis is based on Tesla cracking the code on self-driving, which will require navigating a number of regulatory hurdles and acquiring enough data to train the software.

Rosner has a Buy rating on the stock and a $189 price target.

On the flip side, noted Tesla bull Tasha Keeney at ARK Invest believes the long-term potential of Tesla is largely tied up with self-driving and autonomy.

"They have an unparalleled data advantage compared to every other company that's solving for full autonomy,” Keeney said in an interview with Yahoo Finance Live. As with AI, Keeney said data is the key to training models and getting to a working model of self-driving. She said Tesla’s full-self driving (FSD) beta is nearly there, noting that Tesla is accumulating 2.5 million miles of self-driving data from customers every day. Competitors like Waymo have only logged a little over 10 million miles since the beginning of the project, Keeney said.

“We think this is going to drive the future value of Tesla. When we look out five years, we think it'll be two-thirds of the enterprise value in five years. So we're super excited about it,” Keeney said.