COA News 2024


‘It would be a disaster of epic proportions’

Wedbush analyst Dan Ives has stepped up his warnings about a Tesla robotaxi – if CEO Elon Musk makes it a priority and relegates a cheaper electric vehicle to the backseat.

The longtime Tesla bull told CNBC on Friday that such a move would be a gamble that could determine the electric vehicle maker’s future for years to come.

A sub-$30,000 mass-market EV, which Wall Street has dubbed the Model 2, could account for 50% to 60% of Tesla’s growth in the next two to three years, while a fully autonomous robot taxi may not be ready yet is for another five to six years, Ives said.

“We have experienced many painful moments for Musk and Tesla,” he added. “This is up there.”

Ives, who has often coined various metaphors and analogies for his sharp take on Tesla, warned that what was once a Cinderella story could become a “Nightmare on Elm Street.”

Although he is optimistic about robot taxis and autonomous driving in the long term, this should not be at the expense of a Model 2.

“If that were to happen, it would be a disaster of epic proportions,” Ives said.

He predicted that Tesla will experience a moment of truth on Tuesday, when its quarterly results are released and Musk will hold a conference call with Wall Street analysts.

If the loyal Tesla bulls don’t like what they hear on the call, they can bail, because sidelining a Model 2 would leave a huge gap in growth for years to come, he said. Ives compared it to Apple CEO Tim Cook dropping a similar bombshell during his May 2 earnings call.

“This would be like Cook coming out on May 2 and saying, ‘Okay, iPhone 15, now look, we don’t have anything until the iPhone 21. But trust us. Thanks for joining the conference call,'” Ives joked.

Sure, he said he remains bullish on Tesla long-term, but said he also needs to hear Musk’s growth strategy in China, which represents 60%-70% of the company’s growth but where cutthroat EV competition has set up a ‘game’. of Thrones” situation.

Musk’s credibility is also at stake, as the last few earnings calls have been “train wreck horror shows,” Ives added.

The stakes are high for Tesla after reporting quarterly delivery numbers that were 13% below Wall Street consensus estimates earlier this month. Meanwhile, Tesla shares are down 41% this year.

In a research note last week, Ives said Musk and his company are experiencing a “Category 5 demand rush” in the EV market. He said Tesla is stuck between “two waves of growth” – the first led by a surge in sales of high-end EVs, and a second that should come from electric cars and robo-taxis for the masses. But despite this story, “patience among investors is starting to run out.”

This comes after Reuters reported earlier this month that Tesla had abandoned plans to build the Model 2. Musk responded in response tweetsimply saying that “Reuters is lying (again),” without elaboration.

Amid the recent concerns about demand, so does Musk announced on April 5 that Tesla will unveil its robot taxi at the end of the summer.

Meanwhile, Tesla cut prices for its electric vehicles in the US late Friday, pushing some models to their lowest levels ever. That comes after Musk announced 10% layoffs last week and recalled nearly 3,900 Cybertruck pickups to repair or replace accelerator pedals that can cause unintended acceleration.

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