Tesla (TSLA) is gearing up for a series of key events that could significantly impact its stock price in the coming months. Despite facing challenges over the past few years, including compressed margins, intense competition, and corporate shake-ups, the electric vehicle leader has some major opportunities on the horizon that could shift the narrative. Here’s what investors need to keep an eye on as we move into October.
Robotaxi Event: A Potential Game-Changer
On October 10, Tesla will host its highly anticipated Robotaxi AI event, which has the potential to redefine the company’s future. Investors are eagerly awaiting the unveiling of Tesla’s purpose-built, fully autonomous vehicle prototype, known as the Cybercab. Elon Musk is expected to provide updates on regulatory approvals and timelines for rolling out the Robotaxi service, which could unlock a multitrillion-dollar market opportunity.
Estimates for the autonomous taxi market vary widely. MarketsandMarkets predicts the market will be worth $45.7 billion by 2030, but Cathie Wood of Ark Investment Management sees an even larger opportunity, projecting a market size between $8 trillion and $10 trillion. Wood believes Tesla could capture up to 50% of this market, potentially driving a tenfold increase in its stock price. While these figures may seem ambitious, Tesla’s ongoing advancements in Full Self-Driving (FSD) technology and its vast trove of driving data position it uniquely to capitalize on this growth.
Q3 Delivery and Production Numbers
Before the Robotaxi event, Tesla will report its third-quarter delivery and production data on October 2. Analysts expect the company to deliver approximately 460,000 vehicles, in line with current consensus estimates. This data will provide investors with insight into Tesla’s ability to maintain its production momentum amid rising competition from rivals like BYD.
Tesla’s Q3 results will also serve as a critical checkpoint for understanding how the company is managing operational challenges, including supply chain issues and recent price adjustments. Any positive surprises in the delivery numbers could act as a catalyst for the stock, while in-line results would keep the market’s focus on the upcoming Robotaxi announcements.
Interest Rate Cuts: A Tailwind for Demand and Margins
The Federal Reserve recently cut interest rates by 50 basis points, marking the first reduction since the pandemic began. Lower interest rates can be particularly beneficial for Tesla, as they reduce the cost of financing for consumers, making EV purchases more affordable. With further rate cuts expected in 2024, Tesla could see a boost in demand without needing to lower vehicle prices further, helping to improve its profit margins.
While Tesla continues to face competition in the EV space, it maintains a slight edge, having delivered 443,956 vehicles in Q2, narrowly outpacing BYD. With the benefit of rate cuts, Tesla can focus on maintaining its market leadership while exploring new growth avenues.
Expanding Energy Storage Business
Tesla’s energy business remains an underappreciated part of the company’s overall strategy. In the second quarter, Tesla reported record energy storage deployments and profits, with plans to further ramp up production at its U.S. facilities and a new Megapack factory in China. As demand for renewable energy storage solutions grows, Tesla is positioning itself as a leader in this space, which could add another layer of growth to its already diverse business model.
Valuation and Market Sentiment
Currently, Tesla’s shares trade at 8.8 times trailing-12-month sales, below the historical five-year average of 9.7x. While not the cheapest, the valuation is more reasonable given Tesla’s long-term potential and recent market correction. For investors considering whether to enter or expand their positions, these upcoming catalysts could serve as pivotal moments that drive the stock higher.
Bottom Line
Tesla is heading into October with multiple events and updates that could reshape investor sentiment. From the unveiling of new autonomous technologies to solid delivery figures and supportive macroeconomic conditions, the next few weeks will be crucial. For those looking to capitalize on potential stock movements, now might be the time to watch Tesla closely.
