‘That’s it?’ Morgan Stanley rips Tesla robotaxi event for lack of detail

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‘That’s it?’ Morgan Stanley rips Tesla robotaxi event for lack of detail

Wall Street has been fairly hot-and-cold on Tesla stock this year — and its highly anticipated robotaxi unveiling on Thursday isn’t helping to improve investor sentiment. Morgan Stanley’s Adam Jonas said he walked away particularly underwhelmed. “We were overall disappointed with the substance and detail of the presentation. As such, we anticipate TSLA to be under pressure following the event,” Jonas, the firm’s head of global auto and shared mobility research, said in a Friday note to clients entitled “That’s it? Disappointing Lack of Detail.” Investors had been piling into Tesla shares ahead of its “We, ******” event in Los Angeles, which was thought to be the struggling automaker’s biggest catalyst as an evolving artificial intelligence company. But the market’s momentum has since reversed: the stock, which plunged nearly 8% on Friday, is down more than 11% for the year. By comparison, the S & P 500 and Nasdaq have both rallied around 22% year to date. TSLA YTD mountain Tesla stock this year. Jonas pointed out that investors left the hyped-up event with no demonstration of or updates to the latest advancements of Tesla’s full self-driving technology and a lack of information around the rate-of-change of future iterations. He also said the company didn’t mention its go-to-market strategy or provide insight into the economics of a supervised and unsupervised ridesharing service, and didn’t elaborate on the teased relationship between Tesla and CEO Elon Musk’s xAI startup. Instead, Tesla’s announcement of a cybercab left Jonas questioning the car’s capabilities, such as its hardware and sensor technology, expected autonomous capabilities, and its range and safety. The analyst noted that Musk slated cybercab production for “before 2027,” but admitted he can be optimistic about timeframes. In the past, Musk has repeatedly set visionary goals for shareholders and missed his own deadlines . Still, Tesla’s management commentary did confirm the cybercab vehicle would be less than $30,000, which is largely in line with Jonas’ estimates and confirmed Tesla’s ability to have a lead over other autonomous vehicle makers with its cost-effective hardware, scalable software and large user base. “This speaks to TSLA’s current theoretical cost advantage over Uber’s current cars and Waymo (with LiDAR),” Jonas said. “The extent to which TLSA could offer a scaled autonomous offering faster than either player therefore represents a threat, but there was nothing last night to make that a larger threat.” Simply put, the event ******* to offer a significant bright spot for Tesla’s stock, according to Jonas. To be sure, Tesla’s still the top pick in Morgan Stanley’s autos coverage. Jonas has an overweight rating on the stock with a $310 price target, which suggests shares have almost 30% potential upside from Thursday’s close. Jonas also mentioned that Tesla’s debut of its futuristic Robovan lacked detail about technical specifications and costs, and that it remained unclear whether the large vehicle or the Cybercab were operating fully autonomously in the venue. Tesla’s showcase of its Optimus humanoid robots, which Jonas believes relied on human intervention, also did not clearly show “significant progress” with the technology, he said. The analyst has an eye on Tesla’s expectation to start fully autonomous, unsupervised FSD in Texas and California for its Model 3 and Model Y electric vehicles. He said it is an “important medium-term timeline to monitor as potential validation of TSLA’s approach to unsupervised FSD (end to end, camera only).” Bank of America analyst John Murphy was also encouraged by this FSD timeline provided by Musk, alongside the Tesla’s cybercab production target dates. He wasn’t as disappointed as many other investors — saying the event does ultimately live up to the hype — and reiterated his buy rating and $255 price target on shares. Analysts polled by FactSet currently have a consensus hold rating and average target price of $214.16 on the stock, far more bearish than Jonas’ target.

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