Elon Musk is sweet at two things: having a whole lot of kids and pissing people off. Now, the Tesla CEO is angering his investors after he sent out an especially vague social media post following a report from Reuters that the planned $25,000 Tesla is dead. He principally accused the outlet of “lying” on his social media platform, Twitter.
That isn’t the crux of the difficulty for investors, though. Moreso, they’re pissed off that Musk has been so wishy-washy on the entire Model 2 vs. Robotaxi thing, in keeping with Reuters. Is it happened or isn’t it, Elon? That isn’t their only issue, either. Investors would also very very similar to the sales and stock slide Tesla is coping with to finally end. I can imagine they weren’t thrilled with the news that the Austin, Texas-based automaker just laid off 10 percent of its global workforce.
Here’s what analysts on Wall Street are telling Reuters:
“The street wants and NEEDS answers” when Tesla holds an earnings call scheduled for April 23, wrote analysts for Wedbush Securities after the layoffs were revealed. They cited a months-long “horror show” of bad Tesla news and called for a transparent “strategic vision … with Model 2 a key component.”
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Wedbush Senior Equity Analyst Dan Ives told Reuters that Musk’s silence on the Model 2 was “gut-wrenching” to Tesla investors “because it’s so instrumental to the growth story.”
Ross Gerber, president and CEO at Gerber Kawasaki Wealth & Investment Management and a Tesla investor, put it more bluntly. “There’s no point in even investing in Tesla if they don’t come out with this car,” he said.
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The Street also wants clarity on one other key aspect of the April 5 story: That after ditching the affordable-car project, Tesla plans to maneuver forward with a self-driving robotaxi on the identical small-car platform.
Big banks are also holding their breath in relation to Tesla, in keeping with Reuters:
An evaluation from Deutsche Bank, echoing others, noted: “we await clarity from Tesla.” It described a Model 2 cancellation as “completely thesis-changing,” saying it might cause investors betting on Tesla’s mass-market growth to throw within the towel, making way for “AI/tech investors with considerably longer time horizons” for robotaxi development.
Wedbush sees a bleak outlook without the Model 2. Wedbush analysts wrote last week that killing the vehicle could be a “debacle” for Tesla’s growth prospects and that a robotaxi was no “magic model” to switch it.
Musk had said as recently as January that Tesla would deliver the Model 2 within the second half of 2025, confirming an exclusive Reuters report on those plans. “For the company to do a 180 in the course of three months would be ‘Twilight Zone,’” said Ives, of Wedbush. Tesla, Ives said, was already late in launching the event of the long-promised reasonably priced model.
“A lot of this is self-inflicted – no adult in the room,” he said.
Just to make things more confusing, Musk has also posted that the Robotaxi is coming on August 8, but he didn’t give any more information than that. Odds are incredibly strong that August 8 will come and go, and no Robotaxi shall be revealed. To be fair, Musk didn’t say what yr it might be. He also said specializing in the Robotaxi is the “blindingly obvious move.”
For probably the most part, investors appear to like that concept, says Reuters. If I’m being honest, I feel like a whole lot of this latest Robotaxi chatter is supposed to stop the stock from tumbling further.
Since the April 5 Reuters report, some investors have cheered the thought of specializing in robotaxis as a substitute of the Model 2. Musk’s two initial posts helped reverse losses in Tesla’s stock, which dropped 6% after the Reuters report on the reasonably priced model.
Still, Musk’s remarks left investors guessing over what vehicle Tesla plans to construct next – and, critically, on what timeline. The stock dropped again with Monday’s news of the layoffs, and is now down greater than 45% since a recent peak in July.
So, is a Model 2 coming? Probably not. Is a Robotaxi coming? Also not going. Is Tesla about to face some real financial consequences for Elon Musk’s actions? Almost actually.
If you wish more information on this whole Model 2 vs. Robotaxi debacle, head over to Reuters.
Credit : jalopnik.com
