TSLA: More than a Car Company?

Tesla's stock was downgraded to Sell yesterday due to concerns over the delay of its robotaxi event from August to October, sending the stock down -8.4% and erasing about $100 billion in market value. Analysts are worried that the delay introduces "narrative risk," potentially shaking investor confidence in Tesla's long-term promises regarding its robotaxi future.

We think this worry is premature. And brings up perhaps the most important question for investors when approaching TSLA.

Do you see Tesla as merely a car company, or as a major disruptor in AI and robotics?

We see the latter -- and it's why we are bullish.

Here's what we're watching...

Tesla's Optimus robot, also known as Tesla Bot, is a humanoid robot designed to handle repetitive and dangerous tasks, leveraging Tesla's advancements in AI, neural networks, and computer vision technology. Initially announced in 2021, Optimus is set to revolutionize both industrial and consumer applications.

The latest iteration, Optimus Gen 2, debuted at the 2024 World Artificial Intelligence Conference in Shanghai. This new version features significant improvements, such as enhanced mobility, better dexterity, and faster walking capabilities. It is equipped with Tesla-designed actuators and sensors, allowing it to perform delicate tasks like picking up and boiling an egg​.

Tesla plans to start integrating these robots into its manufacturing processes by the end of 2024, with broader commercial availability targeted for 2025.

Elon Musk has emphasized that Optimus has the potential to be a major revenue driver for Tesla, envisioning widespread adoption in both industrial settings and personal use.

Musk predicts the demand for Optimus could be in the range of 10 to 20 billion units, potentially transforming Tesla into a multi-trillion dollar company.

Aside from advancements in robotics, Tesla is also focused on making its vehicles more assessible (in regard to price). 

Yesterday Tesla launched a new rear-wheel drive variant of its Model 3 long-range vehicle, priced at $42,490, which is $5,000 less than the all-wheel drive version.

In the second quarter, Tesla reported a smaller-than-expected 5% decline in vehicle deliveries, as price cuts and incentives helped counteract cooling demand. The company is set to report its second-quarter earnings on July 23.

And LikeFolio data confirms consumer interest in Tesla vehicles remains high. 

Visits to the company's website have increased by +6% YoY and +36% on a 2-year stack.

TSLA also commands serious consumer mindshare, with 62% of mention volume vs. GM at 23%, Ford at 13% and Rivian counting the rest.

And we haven't even scratched the surface of other tremendous tailwinds, including the implications of Tesla's robotaxi and solar capabilities.

Bottom line: we aren't betting against TSLA stock or its leader who can land rockets on a stage.