The future of transportation is electrifying, literally, thanks to Tesla’s (NASDAQ: TSLA) continuing innovation and expansions. With new revelations regarding the upcoming Robotaxis, expanded partnership with PepsiCo (NASDAQ: PEP), and a doubling down on AI developments, Tesla is closer than ever to reaching its goals of solving full autonomy, and solidifying its position as the world’s EV market leader.
Tesla Semi News
Tesla launched its Semi truck way back in 2017, and delivered a few to PepsiCo later in December 2022. As of January 2024, PepsiCo has a total of 36 Tesla Semis deployed in its fleet, some of which are based out of Frito-Lay’s Modesto facility in California. Recently, Semi Truck Engineering Senior Manager, Dan Priestly, said that Tesla has started delivering an additional 50 Semi trucks to PepsiCo at its California facility at the Advanced Clean Transportation Expo event in Las Vegas, bringing the total number of Semis in PepsiCo’s fleet to 86 trucks.
Also, he added that the company is looking to build more trucks this year, including for its own operations, deliveries to PepsiCo as well as for some other customers. It’s important to note that a single Semi Truck could cost up to $250,000, so that is $12.5 million in Tesla’s pockets from the Semi Truck alone, and from one customer alone. With plans to expand production to 50,000 units a year, according to Priestly, Tesla therefore has a massive opportunity with the Semis, and it’s one that not a lot of TSLA stock investors pay attention to.
Adding to this point, it was announced that Tesla’s Cybertruck will receive FSD in June with FSD’s new 12.5 version, and a picture of the Cybertruck with cameras on the hood started circulating online. Similarly, there is a picture of the Semi truck with almost the same pair of cameras on the front as well. Therefore, installing FSD in the Semi truck could potentially be the next step for Tesla, as the truck is the only vehicle left in its fleet without the software.
In fact, it was announced last year that the Semi truck already had all the necessary FSD hardware. However, the software wasn’t ready, but with how rapidly FSD has been developing since the beginning of this year, it wouldn’t be too surprising if Tesla announces that Semis are getting FSD soon.
Robotaxi Leaks
Over the past few years, Tesla has been developing a vehicle entirely engineered to operate autonomously, which the company referred to as Robotaxi. Now, Tesla may have unintentionally leaked interior shots of its self-driving taxi in a promotional video that was posted to urge shareholders to approve Elon Musk’s $56 billion remuneration package, and the automaker’s incorporation from Delaware to Texas.
The two-minute video includes several production sequences, stunning images of Tesla’s production vehicles, and remarks from Musk. However, many people drew attention to a picture of a car’s interior in the video that doesn’t match any of the ones Tesla has released so far. The image shows what appears to be a two-seater vehicle without a steering wheel and a center display similar to what is found in current Tesla vehicles. Additionally, the seats are unlike what you would find in modern vehicles. In fact, they are something closer to what you would find in public transit, like a train.
This is supposedly what Tesla’s Robotaxis looks like, and it’s somewhat similar to what investors and Tesla fans have imagined; something revolutionary that will completely transform transportation. Therefore, investors became even more excited about it, and are now looking forward to seeing the vehicle’s exterior.
Morgan Stanley on Elon Musk’s Pay Package
The promotional video with the Robotaxi pictures was posted to urge shareholders to approve Musk’s pay package, which indicates how important the upcoming shareholders vote is for Tesla, and this was something that was recognized by Morgan Stanley (NYSE: MS).
CEO Elon Musk was the subject of a recent Morgan Stanley research note that highlighted the growing symbiosis between Tesla and Musk’s broader business ambitions. According to the analysts, Musk now “needs Tesla more than ever” as his focus shifts to capital-intensive AI development across his companies. The note also stresses that Tesla plays a crucial role in lowering the cost of capital and providing vital data to improve AI learning, and with Musk’s emerging network of AI-driven businesses expected to invest tens of billions in coming years, Tesla’s success will be key in enabling these ambitious plans.
Additionally, data captured by Tesla vehicles, both inside and out, notably improve AI learning and development. They also noted that the automotive total addressable market, often referred to as the “internet of cars,” is one of the largest in the world, encompassing 12 trillion miles and hundreds of billions of vehicle hours.
In addition to that, the car’s unique attributes, such as mobile servers, computing capabilities, thermal management, and energy storage, are viewed as vital in the emerging AI-driven hybrid compute ecosystem and these attributes have broad implications for the broader automotive industry and not just for Tesla. Therefore, as Musk’s empire becomes more interdependent, the note suggests Tesla’s upcoming shareholder meeting will be one to watch closely.
TSLA Stock Forecast
TSLA stock investors are currently voting in the run-up to the June 13th annual meeting as everyone awaits the result to see if Musk’s 2018 $56 billion compensation package will be reapproved or not. It is also important to note that the vote on Musk’s compensation requires a simple majority of votes, excluding those owned by Musk and his brother, Kimbal Musk.
Meanwhile, the vote to reincorporate Tesla in Texas requires a majority of all shares outstanding, with any uncast votes counted as “no.” While it is impossible to predict the outcome, it is widely expected that the event could drive material volatility in the stock. And when we look at the stock, no one can deny that TSLA stock has taken investors on a roller-coaster ride in recent years as after the stock touched all-time highs in November 2021, TSLA stock fell over 72% in the next 15 months.
However, shares of Tesla have surged 25% in the last month following its Q1 results and some high-profile announcements regarding FSD, Robotaxis, and new affordable cars. With that being said, Wall Street was excited about Tesla’s FSD technology, which should eventually enable it to launch a Robotaxi service that could potentially disrupt the ride-hailing market in the U.S., which is dominated by Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT).
Unlike these two companies, this self-driving taxi will allow Tesla to report much higher margins compared to Uber, as driver costs will be non-existent. Moreover, according to an Ark Invest research report, the Robotaxi market could generate around $440 billion in sales, which is almost 3 times the size of the ride-hailing market in 2023. Given this single high-profile announcement, Tesla looks very promising in the long-term, especially with those numbers, let alone the subscription costs for the FSD software itself in Tesla’s fleet, which will be a recurring revenue for the company.
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