Final evening (10 October), Tesla (NASDAQ: TSLA) held its extremely anticipated robotaxi occasion. On the Hollywood occasion, CEO Elon Musk revealed the corporate’s plans for self-driving taxis. Ought to I rush to purchase Tesla inventory for my ISA now that we all know what its plans are? Let’s focus on.
Robotaxis are the long run
As a progress investor who’s seeking to capitalise on long-term technological traits, I’m enthusiastic about robotaxis. Wanting 10-20 years out, I reckon that they’re the way forward for mobility (they’re far safer than human-driven automobiles).
Already, I’ve a big place in Alphabet – the proprietor of Waymo (which has self-driving taxis on the highway within the US at present). I’ve additionally been build up a place in Uber (which companions with Waymo), as I reckon it has the platform that a variety of robotaxi corporations will function from sooner or later.
As for Tesla, I used to be ready for the robotaxi occasion to see what the corporate’s plans are. My analysis led me to imagine that Tesla would reveal a number of Cybercab prototypes, an app for shoppers, and an replace to its Full Self-Driving (FSD) know-how that may permit its automobiles to drive by themselves.
What did Tesla reveal?
Ultimately, I assumed the occasion final evening was a little bit bit underwhelming (given the hype). The corporate did showcase a brand new Cybercab prototype that will probably be out there for lower than $30k. Futuristic in design, it had no steering wheel or pedals.
It additionally revealed a ‘Robovan’ that may transport 20 individuals. Musk stated this may very well be supreme for transporting sports activities groups.
However there was no app for shoppers. And the timelines for robotaxi roll-out have been a bit disappointing. At the moment, Tesla doesn’t plan to start out Cybercab manufacturing till 2026 or 2027. On condition that Musk has a historical past of over-promising and under-delivering on the subject of timelines, it may very well be years till these self-driving taxis are literally on the highway.
It’s value noting that Tesla plans to launch totally autonomous driving in Texas and California subsequent yr. Nevertheless, the corporate hasn’t secured regulatory approval but so, once more, it could truly be years earlier than we see this.
Ought to I purchase?
On condition that Tesla isn’t prone to have robotaxis on the highway for some time, I’m not in a rush to purchase the inventory at present. Lately, it has rallied arduous. And for me, the valuation is simply too excessive proper now.
At at present’s share worth, the forward-looking price-to-earnings (P/E) ratio’s 105. That’s about 5 occasions the P/E ratio Alphabet’s buying and selling on.
As for its market-cap, it’s round $750bn. That compares to $160bn for Uber.
Evaluating these market-cap figures, Uber appears a a lot safer guess on self-driving taxis to me. Finally, lots of of billions of {dollars} of Tesla’s market-cap’s primarily based on robotaxi optimism and I’m not satisfied that’s justified when it’s seemingly that there will probably be many corporations with autonomous taxis sooner or later (Waymo, Mercedes-Benz, Cruise, and many others).
Now, I’ll find yourself shopping for Tesla inventory at some point. Evidently the corporate’s pivoting to robotics and AI and that is thrilling.
However for now, I’m going to maintain it on my watchlist. And I’m going to proceed build up my place in Uber, as I feel it has tons of potential.
