Tesla earnings: Wall Street wants more detail on robotaxi plans

All eyes will be on Tesla on Wednesday, when it reports earnings for the third quarter of what has been a difficult year for the world’s most valuable carmaker.
The electric car company, led by Elon Musk, has already published some figures before its full results, which showed it had delivered 462,890 cars in the period, a 6.4 per cent rise compared with the same quarter last year. This was below Wall Street estimates, but it did mark Tesla’s first quarter of year-on-year delivery growth for 2024. In the first and second quarter, deliveries dropped by about 9 per cent and 5 per cent respectively.
This growth suggests the beginning of a recovery in China, where Tesla has been grappling with intense competition from local electric vehicle (EV) rivals and weak consumer demand. The company has been boosting its promotions in the region, offering discounts on some models as well as zero-interest loans.
For now Wall Street expects that Tesla sales will land at $25.5 billion in the third quarter, flat on the prior three months, and that net income will rise to $1.7 billion from $1.5 billion the previous quarter.
Yet the steep premium on Tesla shares, which trade at 99 times forward earnings, rests not on its core business of selling cars but on Wall Street’s huge growth expectations for its developments in self-driving software, robotaxis and artificial intelligence.
There was a big build-up for the company’s robotaxi event this month. Musk, 53, thinks Tesla could offer robotaxi rides for 30 to 40 cents per mile to the customer. Some bullish analysts believe this could lower to 25 cents per mile at scale, compared with the $2 mark paid in western markets for the likes of Uber, and crucially below the 70 cents-to-$1 range that it costs to drive a personal car.
These are grand ambitions, but Tesla shares dropped by about 8 per cent after the robotaxi event, as investors felt the company had failed to provide sufficient detail around its go-to-market strategy, ride-share economics and updates on its self-driving software.
The final model of the robotaxi is not completed, but early designs suggest it is likely to be a two-door sedan with “scissor doors” that swing upwards to open, with no steering wheel or pedals. Tesla has built 20 Cybercabs, which it thinks will cost less than $30,000 once it is manufacturing at scale. Production is slated to start in 2026, although some analysts think that this might be too optimistic. So far there are no production targets for the even bigger Robovan, which could carry up to 20 people or transport goods.
The most bullish of Tesla backers think the robotaxi service could be transformational for the business, so some analysts have suggested the company could announce that it wants to raise capital as it invests more in this area. Analysts are likely to push Tesla for more detail on its robotaxi strategy on Wednesday.