Tesla's upcoming Robotaxi event, titled 'We, Robot,' may not provide the positive catalyst that investors are hoping for regarding the company's share price. According to analysts at Truist Securities, the focus of the anticipated event will likely shift from the unveiling of new vehicle models to a more technology-driven initiative centered around artificial intelligence.
The event is set for Thursday, following a postponement that allowed the electric vehicle manufacturer to enhance the robotaxi product and integrate additional features as stated by CEO Elon Musk during a conference call in July. Analysts expect that the event will showcase a prototype of the robotaxi vehicle, scheduled for a rollout in 2026.
The design and manufacturing of this vehicle will likely rely on a manufacturing network rather than a traditional production line, which indicates Tesla's intent to innovate in its approach to vehicle production. This shift may also incorporate new technologies aimed at reducing production costs, as highlighted by Truist analyst William Stein in their client note. A key element of the upcoming robotaxi will be a revised, less costly powertrain.
This new drive unit intends to eliminate all rare-earth elements and significantly reduce the silicon carbide content—currently 75% of Tesla's traction inverter switching components. As a result, suppliers like STMicroelectronics and ON Semiconductor may face potential challenges, given their connections to silicon carbide production. Furthermore, the robotaxi prototype is expected to leverage a smaller size, cutting-edge technological advancements, and a new manufacturing architecture designed to achieve a much lower price point.
This pricing strategy is anticipated to expand Tesla's total addressable market significantly, reaching consumers beyond what the current model lineup offers. The integration of enhanced AI hardware and software into the robotaxi also signifies Tesla's commitment to advancing its technology stack, as per the insights from the brokerage. By the end of next year, Tesla aims to introduce a vehicle featuring most of the robotaxi technologies, but it will adhere to a conventional production line rather than the 'unboxed' production architecture.
Should Tesla unveil such a vehicle at the upcoming event, it might serve as a positive catalyst for the stock price, although analysts remain skeptical about this outcome. Truist Securities has maintained its 'hold' rating on Tesla’s stock with a price target set at $236. The company recently reported its third-quarter deliveries, which fell short of Wall Street expectations, potentially adding to investor concerns. Current stock price for Tesla is $244.54, reflecting a change of +3.71, which is a percent change of +1.54..