Tesla recently hosted its “We, robot” event, showcasing recent production innovations such as the CyberCab and Optimus Gen 2 Robot. While the company typically hosts an annual demonstration of its latest technology, this year’s event was expected to be groundbreaking. Full Self-Driving (“FSD”) technology and demonstrations of real-world artificial intelligence (“AI”) products, like Optimus, dazzled attendees.
Tesla sees a bigger opportunity to revolutionize the automotive industry in addition to achieving autonomous driving (AD). With the company delivering 1.8 million cars in 2023, skepticism remains about how much share of the global auto market they can win with newer, more affordable designs. Investors likely wanted to hear that these new vehicle models would raise the company’s long-term earnings potential, with comments that the next leg of growth could be less capital intensive and quicker to market, perhaps seen as bullish. However, many of Musk’s comments about this next generation car hinted that the company will need to build new manufacturing plants and lengthen the time to market. These factors create higher uncertainty for Tesla’s future and may have weighed on the stock.
Optimus, Tesla’s humanoid robot, also appeared at the event (*Reference Bloomberg – Tesla Optimus Bots were remotely operated).
This was perhaps the most constructive demonstration of the company’s technology. There was a fleet of Optimus robots walking on their own. More than just hype, Optimus was also shown to be catering to event attendees, such as serving refreshments. It is a stark advancement from Optimus’ debut just years ago and provides a reminder to investors of Tesla’s ability to push boundaries in robotics.
Taken as a whole, Tesla’s “We, robot” event was admittedly more of a show than a tangible business plan. Those skeptical of the stock likely saw the venue of the event, the Warner Bros. Studios, as a fitting location. Yet, investors may be well served to assess the bigger picture. The possibility of safe FSD technology, a new generation of cars, and real-world AI products previously sounded like a Sci-Fi fantasy. A future like that may be just around the corner.
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