Tesla didn’t wait for the new autonomous driving law to
take effect in Texas in September, despite pleas from some local Democratic
lawmakers last week, and went ahead with the launch of its robotaxi service in
Austin. Investors responded enthusiastically: Tesla shares soared 8% this week, surpassing the $350 barrier.
However, the market’s reaction seems overblown, given that
this is more of a pilot program than a self-driving Uber for everyone. It
starts with just ten self-driving Model Y vehicles operating within a limited
area. Each car will carry a safety supervisor on board, along with a remote
operator ready to take control if needed.
As for the results, early images show that the cars perform
routine tasks well. But it’s worth noting that the service runs from 6 a.m. to
midnight and pauses during bad weather. As for when robotaxis will be fully
available to the public, there’s still no official timeline. Elon Musk just
says they’re coming to other cities soon.
Will Tesla
stock rally continue?
New triggers will be needed for that. One of them could be
positive news regarding trade negotiations between the U.S. and China, or at
least the EU. The problem is that so far, there has been nothing but upsetting
news in this regard, rather than agreements that threaten further restrictions,
especially against China.
Returning to the impact of robotaxis, as it is still only a
pilot, it will not bring immediate benefits. Meanwhile, the autonomous driving
race is heating up. Alphabet’s Waymo is already providing paid services in
cities such as San Francisco, Phoenix, Los Angeles, and Austin. Amazon’s Zoox
is also in the game, especially in Las Vegas.
Elon Musk says Tesla’s approach is more cost-effective. For
instance, instead of building an expensive fleet from scratch, Tesla plans to
convert existing vehicles into robotaxis with software upgrades. And unlike
competitors like Waymo, Tesla relies only on cameras, eschewing the costly
sensors others use.
What’s more concerning is that Tesla is still facing
falling vehicle sales — a problem that won’t be easily fixed, even with Musk
stepping back from the political spotlight. The damage to the brand has
already been done. And let’s not forget that Trump’s proposed budget plan
includes cuts to tax credits for EVs.
According to Wells Fargo, Tesla’s global deliveries are
expected to fall 21% year-over-year in the second quarter, with an estimate of
only 343,000 units, about 17% below the consensus forecast of 411,000 units.
Valuation also remains a concern, as Tesla trades at extremely high multiples
compared to its closest rivals.
The good news for Tesla investors is that the markets could
remain illogical for a long time to come.
This article was written by FL Contributors at www.forexlive.com.