What you need to know

Tesla (TSLA) CEO Elon Musk is poised to unveil his company's efforts to produce a self-driving “robotaxis,” delivering either a massive win for investors that justifies skipping out on a highly anticipated car — or a major disappointment.

Musk talked about it Development of a robotaxi network since at least April 2019when he talked about a fleet of autonomous Teslas that could drive customers around when their owners didn't need them. The next big update came in 2020 when the CEO said a robotaxi would be unveiled in 2023 and go into production in 2024, but that didn't happen.

But on Thursday, after another series of delaysTesla appears to be prepared for what Musk has called a robotaxi “product launch.” Regardless of whether it is a successful launch or not 2012 presentation of the Model X or fail like the infamous debut of Tesla's Optimus robot in 2021, which featured a person on display dancing in a costumeis not known to anyone without insider knowledge.

The “We, Robot” event is scheduled to begin Thursday at 10:00 p.m. ET/7:00 p.m. PT at Warner Bros. Discovery's (WBD) Film studio near Los Angeles. While the studio floors will be flooded with Wall Street analysts, Tesla influencers and investors, this will also be the case Live stream on X, Musk's social media platform.

Here's what you need to know:

The product(s)

The robotaxi, nicknamed “Cybercab,” is said to be Tesla’s first car that doesn’t require a driver. The Austin, Texas-based company's electric vehicles offer some self-driving functions Driver assistance softwarebut a driver is still required.

Tesla's software, Full Self-Driving (FSD) and Autopilot, also caused controversy at Tesla and many long-standing issues Litigation to allegations of false advertising. The US National Highway Traffic Safety Administration checked 956 crashes where it was originally reported that autopilot was in use. The agency has opened more than three dozen investigations into accidents involving Tesla software.

Accordingly Bloomberg NewsThe Cybercab is expected to have two front seats and two doors that open upwards like “butterfly wings”. That would be consistent with that Concept art mentioned in Walter Isaacson's recent Musk biography.

Musk also teased that his team will “show a few different things” on Thursday, which some have linked to the three.Mystery vehicles“ included in Tesla’s presentation at its annual shareholder meeting. Musk is also expected to discuss his company's plans to develop and integrate FSD into its award-winning semi-truck limited releasereports Bloomberg.

Gene Munster of Deepwater Asset Management said last week He expects to see three vehicles, including the “Cybervan” – a supposedly autonomous people transporter – and the $25,000 Model 2 Reportedly scrapped. Munster expects to see a prototype of the robotaxi as well as previews of the other vehicles.

Play catch-up

Although Tesla is not exactly an unknown Artificial intelligence or autonomyit will still lag behind some competitors. Companies like Google (GOOGL) Waymo, was has been operating autonomous vehicles for yearsData is constantly being collected, often without the controversies that have plagued Tesla.

“Waymo is already way ahead of them, offering thousands of autonomous rides per week in several major cities, and Amazon's (AMZN) Zoox is expected to launch next year,” Will Rhind, CEO of GraniteShares, told Quartz via email. “In the robotaxi space, they don’t have a first-mover advantage and that could be costly if they take a year or more to officially launch their service.”

Tesla will also have to address regulators and the general public, which remains largely skeptical and balanced fearful autonomous vehicles. Thursday's event will be held on property with private roads, which may be partly because Tesla has not yet applied for a deployment permit from California authorities, GLJ Research analyst and Tesla critic Gordon Johnson said points out.

One positive for the company on Thursday, as Tesla bull and Wedbush Securities analyst Dan Ives said in a Wednesday note, is that it isn't exactly lax in its data collection. Tesla has more than 1.5 billion FSD miles – a Level 2 automation systemmeaning it is only partially automated – logged in its data centers.

“There are clearly a number of hurdles and questions that the industry/investors want to hear about, including, but not limited to: insurance, cost of the vehicle, timeline, regulatory approval timeline and overall operations,” Ives said of the event.

The business model

In June, Musk presented his vision for a robotaxi network as a “combination of Airbnb and Uber,” as owners can register their cars for the service at will. He also reiterated his suggestion to Tesla owners that they could make money from the self-driving fleet while they sleep, as the company would call cars to pick up customers of its potential ride-hail service through an app.

“I'm very confident that it will far exceed the value” of the monthly payments customers may have to pay for their cars, Musk said at Tesla's annual shareholder meeting.

Tesla will take some of the revenue from the potential service – which analysts say will likely take years – while the rest will go to owners. A timeline for Tesla's future network is unclear and investors are hoping Musk will elaborate on it on Thursday.

JPMorgan (JPM) Analysts said in June that they did not expect this significant revenue generation for the coming years. Ronald Yevsikov of Guggenheim Securities Yahoo Finance said on Monday that a “truly credible path to robotaxi commercialization in the next 12 to 24 months is extremely unlikely.”

Ark Investment Management has forecast a scenario in which robotaxis make up 90% of Tesla's value by 2029, sending the stock up to $3,100 per share. If a network is not operational by this year, then The price target would drop to about $350 per share.

Ark CEO Cathie Wood said earlier this week that she believes analysts need to positively revise their estimates for the robotaxis' impact on Tesla's earnings. She told Yahoo Finance that she expects a gross margin of 80%.

“This is not an if, but a when for Tesla. And for Tesla, it's also about how quickly are they going to get to market?” Woods said. “How quickly will they implement their goals nationally or even globally?”