Why Shares of Tesla Are Soaring Today
Elon Musk provided a robotaxi update over the weekend.
Shares of Tesla (TSLA 3.67%) traded nearly 4% higher as of 2 p.m. ET today. CEO Elon Musk provided an update on the company’s robotaxi fleet on Sunday, and new data could suggest that its electric vehicle (EV) sales trends are improving.
A wider robotaxi release
According to Barrons, Tesla recently reported longer wait times for its Model Y, rising from one to three weeks to a range of four to six weeks. It could signal that orders are picking up. The first two quarters of the year have shown significant year-over-year decline in EV sales, which is the company’s core business for now.
Image source: Getty Images.
However, one reason for the increased wait time could be the elimination of a $7,500 federal tax credit for EVs that expires at the end of the third quarter.
In other news, Musk said on X on Sunday that Tesla’s robotaxi business would have “open access next month,” meaning that customers would not need to be invited to use the service. He also said last Friday that the full self-driving technology on Model Y vehicles in Austin is roughly six months “more advanced than what is available in cars in America and there are some additional breakthroughs in Tesla AI that will make the car feel eerily human.”
Currently, the company is running a soft launch of robotaxis in Austin, Texas, and San Francisco, where robotaxis are geofenced (limiting where they can go) and reportedly being monitored by humans remotely.
Progress on robotaxis is good news
An improving EV business is good news, but given that investors have largely looked past Tesla’s poor EV performance, I’m guessing that they are more excited about further progress on robotaxis, which is expected to be a massive new business for the company. The positive update on EVs could also be attributed to the expiring tax credit.
While progress on robotaxis will likely help the stock, I’m still not a buyer of Tesla at its monster valuation of over 200 times forward earnings.
Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.