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The End of Tesla Stock?

Tesla's stock took an 8% fall following the much-anticipated "We Robot" event, where the company unveiled its plans for self-driving robotaxis. Despite the stock's surge leading up to the event, market analysts have expressed skepticism. Are they right?

Let's dive into the positives and negatives of the event, and I'll explain why Tesla remains my largest individual stock holding.

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The Key Story

The END Of Tesla Stock?

Event Highlights and Investor Reactions

One of the main reasons for the lukewarm reception is that the event wasn't investor-focused. Key details that investors care about—such as how the Tesla Taxi Network will operate, app demonstrations, specific launch dates, pricing models, and profit splits—were notably absent. This lack of concrete information makes it challenging for analysts to project future cash flows, contributing to the stock's decline.

However, from a product standpoint, the event was undeniably impressive. Tesla showcased a futuristic vision with their new robotaxi design, which adopts the sleek aesthetic of the Cybertruck. The vehicle lacks a steering wheel and pedals, emphasizing its fully autonomous capabilities.

Production is slated to begin in 2026, with a target price under $30,000. They also introduced a robo-van concept designed to transport up to 20 people, though details on production are still vague.

The Self-Driving Timeline

Perhaps the most significant announcement was Tesla's plan to roll out unsupervised self-driving capabilities in Texas and California by 2025. This means millions of Tesla vehicles can operate without human intervention, potentially revolutionizing transportation. Initially, the Tesla Taxi Network will utilize existing Model 3 and Model Y vehicles until the dedicated robotaxis are in production.

Market Implications

Following the event, shares of competitors like Uber and Lyft rose nearly 10%. While Tesla's self-driving network poses a long-term threat to these companies, the immediate impact seems minimal given the lack of specific rollout details.

Tesla's Long-Term Potential

Despite the short-term stock decline, I'm optimistic about Tesla's future. The company continues to lead in electric vehicle technology, energy storage, and now autonomous driving. Their financials remain strong, with significant cash reserves and minimal debt.

It's important to note that Tesla isn't just a car company; it's a technology company that's continually innovating across multiple sectors. While the current valuation includes expectations for businesses that aren't fully operational yet, I believe the long-term growth potential justifies it.

Why Tesla Is My Largest Holding

Investing in Tesla requires a belief in their vision for the future—a future where autonomous vehicles and robots play a significant role. While there are uncertainties around timelines and profitability, I see Tesla as the world's largest startup, poised to dominate several high-growth markets.

Their competitive advantage in data collection for self-driving technology is unmatched. With over 1.6 billion miles driven using their Full Self-Driving Beta, they are far ahead of competitors like Cruise and Waymo.

Final Thoughts

Analyzing Tesla stock isn't straightforward due to the uncertainties and the company's ambitious goals. However, I remain confident in Tesla's long-term prospects and plan to continue holding—and potentially adding to—my position, especially if the stock becomes more attractively priced.

As always, I encourage you to do your own research and consider both the risks and rewards before making investment decisions.

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— Zach

Disclaimer: Dividend Dividend (Dividend Data LLC) is not a professional financial service. All materials released from Dividend Data (Dividend Data LLC) are for educational and entertainment purposes. Dividend Data (Dividend Data LLC) is not a replacement for a professional's opinion. Contributors to the Dividend Data (Dividend Data LLC) might have equities mentioned in the newsletter