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Tesla Readies for Robotaxi Revolution – Shares Up Premarket

Analyst Team trader
Updated 24 Jun 2024

Tesla stock price (NASDAQ: TSLA) is up 0.45% in the premarket session today, as markets get ready for a new week.

Tesla has been the subject of watchful eyes in the past year as its stock experienced significant fluctuations amid various challenges, including heightened competition in the electric vehicle (EV) sector and concerns over CEO Elon Musk's attention on numerous projects. However, two major developments suggest a potential strategic turnaround for the EV giant.

Firstly, Tesla is gearing up to showcase its substantial robotaxi potential. The company has set August 8 as the date to unveil its highly anticipated robotaxi service.

Elon Musk has touted the robotaxi business model as a hybrid of Airbnb and Uber, proposing a dual-ownership model that leverages private vehicle ownership to maximise fleet availability. Such a service could transform urban transportation and represent a novel revenue stream for Tesla.

Secondly, Wedbush Securities analyst Dan Ives expresses confidence that the event on August 8 will not only highlight the robotaxi service but also introduce a broader strategic plan. Ives anticipates the revelation of a new vehicle, possibly a sub-$30,000 car, marking a significant step towards making EVs more accessible to a wider consumer base.


YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Despite the excitement around these developments, Tesla is aware of the regulatory obstacles it faces in rolling out self-driving cars worldwide. Regulatory approvals are intricate and vary across jurisdictions, which could delay or restrict the deployment of Tesla's autonomous features. Still, the company remains comfortable in taking a backseat and not being the first mover in the autonomous car industry. Instead, Tesla prefers to learn from others' experiences, which could be a strategic move that helps them couple innovation with proven practicalities.

Recent developments have shown a renewed focus on Tesla from Elon Musk, which has placated some investor concerns about Musk's divided attention due to his engagement with other ventures. Shareholder confidence in Musk's leadership was reaffirmed with the re-approval of his staggering $56 billion compensation plan. This endorsement comes at a critical time as the company prepares to launch new initiatives.

However, Wall Street analysts exhibit a varied stance on Tesla's stock, holding a mix of bullish, bearish, and neutral positions. The average price target among analysts stands at $176.96, presenting a slight downside potential of 3.3% from current levels.

The lead-up to Tesla's defining event in August may set the stage for a strategic shift that could redefine the company's trajectory. With its robotaxi unveiling and possible introduction of a more affordable EV model, Tesla is aiming to solidify its position as an innovative leader in the automotive industry despite current challenges. The backing of shareholders and Musk's sharpened focus could very well translate into a successful pivot for the company. Only time will tell if Tesla can navigate through regulatory challenges and market expectations to turn its bold visions into reality.

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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY

The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.