Elon Musk Bets Tesla’s Future on Oct. 10 Robo-Taxi Reveal
When Elon Musk takes the stage on October 10 in Los Angeles to reveal Tesla’s new robo-taxi concept, it will be more than just an unveiling—it will be a pivotal moment for Tesla. Musk is set to transform Warner Bros.' studio lot for this event, highlighting the significance of what Wedbush Securities tech analyst Dan Ives describes as a “linchpin day for the Tesla story.”
A Monumental Launch
Celebrated for his grandiose events, Musk has set high expectations this time, contrary to the more low-key presentation of the Optimus robot two years ago. “This will be one for the history books,” Musk declared on social media, underscoring the ambitious nature of the event.
The focus? Full self-driving (FSD) technology. Musk has equated the challenge of achieving FSD to creating a rudimentary form of artificial general intelligence. Current Tesla cars use advanced on-board computers, trained with vast amounts of video data from Teslas already on the road, to drive independently, albeit with required human supervision. Achieving true FSD would be a game-changer, akin to Tesla’s own version of ChatGPT, according to Musk.
A High-Stakes Investment Bet
Musk has voiced a straightforward message to Tesla investors: if you don’t believe in Tesla’s ability to achieve autonomy, sell your stock. Conversely, if you believe in the vision, hold the stock, as Musk confidently predicts FSD technology is worth an astounding $5 trillion to investors. This breakthrough could pivot Tesla from being a car manufacturer to a tech giant with a recurring revenue model—the dream scenario for institutional investors who favor predictable cash flows.
Robo-taxis would shift Tesla’s earnings from being heavily reliant on car sales to generating high-margin revenue from licensing FSD software. The potential earnings from these robo-taxis are significant, with projected annual returns of $37,000 per vehicle—a substantial leap from the $30,000 figure cited back in 2019.
Challenges and Competition
Despite these grand plans, Tesla faces a crowded marketplace. Competitors like Uber and Lyft dominate the ride-sharing industry, but Tesla aims to undercut the competition with its autonomous robo-taxis that wouldn't incur driver costs. Brad Ferguson, president of Halter Ferguson Financial, points out that the U.S. ride-share market is ripe for disruption, with ample opportunity for Tesla to make its mark by offering competitively priced rides.
Investor Sentiment and Timing
Investor sentiment surrounding the October 10 event is buoyed by the Federal Reserve’s recent decision to lower interest rates, which might ease borrowing costs for consumers—a critical factor for Tesla’s high-priced vehicles. Despite fluctuations in Tesla’s profits and earnings projections, the stock has remained resilient, largely thanks to the optimism surrounding the upcoming robo-taxi reveal.
Additional Surprises
Musk has hinted at showcasing a few other surprises during the event. Speculation includes a redesigned Tesla Roadster or advancements in AI and robotics, reflecting Musk’s broader vision for Tesla as more than just an automotive company.
Conclusion
Elon Musk’s October 10 event will be a defining moment for Tesla, potentially reshaping the company’s future and the broader automotive and tech landscapes. As anticipation builds, the stakes couldn’t be higher for Tesla, its investors, and the vision of autonomous driving.
This story initially appeared on Fortune.com.
