One Analyst Thinks Replacing the Cheaper Model 2 With the Robotaxi Would Be a “Debacle Negative” for Tesla

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Akin to a tongue-in-cheek iteration of “he loves me, he loves me not,” Tesla’s near-term narrative is currently being dominated by the following speculative reverie: “Will there be a Model 2, or will there not?”

Reuters published a highly contentious report in early April, disclosing Tesla’s apparent willingness to abandon its upcoming cheaper Model 2 in the face of serious competition from China. While Elon Musk quickly clamped down on the veracity of Reuters’ reporting, this did not stop educated conjecture as to the fate of the $30,000 Model 2. The same day, in an apparent attempt to halt Tesla’s share price slide, Musk announced that the EV giant’s much-delayed robotaxi will be unveiled on the 08th of August, 2024, with the vehicle expected to leverage the same platform as that of the Model 2.

This brings us to the crux of the matter. There appears to be a growing chorus at Wall Street that the robotaxi is a 2030 story, lacking any immediate financial implications. As we noted in a previous post, Bernstein analysts have already termed the robotaxi an “aspirational” move for now.

Today, Wedbush’s Dan Ives has joined this growing chorus, noting that if the robotaxi were to replace the Model 2 as Tesla’s panacea of sorts, it would be a “debacle negative” for the Tesla story.

According to Ives, around 60 percent of Tesla’s growth in the next few years will be sourced from the Model 2, as the sub-$30,000 price point drives another leg of EV mass adoption cycle.

In contrast, Wedbush does not expect truly autonomous vehicles before 2030. Of course, this timeline makes sense, given the plethora of regulatory and legal hurdles in the path of autonomous mobility.

Interestingly, Wedbush’s view on robotaxis mirrors that of Morgan Stanley’s, whose analysts expect material commercial scaling of this revenue stream only after 2030 and beyond.

Of course, analysts are now looking toward Tesla’s earnings call on the 23rd of April to gain further clarity vis-a-vis the fate of the Model 2.

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