# Musk’s Robo-Taxi Announcement Faces Skepticism from Experts

The stock of American electric vehicle manufacturer Tesla has dropped more than 30% this year, drawing considerable attention from investors regarding its future trajectory. Bloomberg News reported on the 6th that there is growing skepticism about Tesla’s growth prospects, predicting that the stock’s rebound might be delayed.

In a recent article, Bloomberg highlighted that Tesla’s shocking quarterly sales decline has raised fundamental questions among investors. “If the era of rapid growth is over, what is the real value of Elon Musk’s company?” the report queried.

Nicholas Colas, co-founder of market research firm DataTrek Research, commented, “There is little visibility into where Tesla’s next growth will come from, whether in electric vehicles or other projects.” He added, “To warrant a premium valuation, a company needs to have either visible earnings growth or a compelling future earnings story. Tesla currently has neither.”

Tesla recently faced a series of negative outlooks due to slowing electric vehicle demand and increasing industry competition. On the 2nd, it reported first-quarter delivery figures that fell significantly short of market expectations. Wall Street analysts had predicted an average of 449,000 units, but Tesla delivered approximately 387,000 units.

Additionally, a Reuters report indicated that Tesla scrapped its plan to produce a low-cost electric vehicle, causing the stock to fall 3.6% in a single day, closing at $164.90 on the 5th. Although CEO Elon Musk quickly denied the Reuters report, calling it a “lie,” investor concerns were not entirely alleviated.

So far this year, Tesla’s stock has plummeted 33.6%, making it the worst performer among S&P 500 companies. In response to the Reuters report, Musk later posted on X (formerly Twitter) that “Tesla Robo-Taxi will be unveiled on August 8.” Post-announcement, Tesla shares rose 3.8% in after-hours trading, reaching $171.18.

Robo-taxis are self-driving vehicles that operate without a driver, picking up passengers and charging fares like a traditional taxi. Musk has been promising since 2019 that the robo-taxi business would soon be a reality. However, skepticism persists.

Both Google’s autonomous driving subsidiary Waymo and General Motors’ subsidiary Cruise have entered the robo-taxi market, but Cruise had its operating permit revoked after a series of accidents, just two months into service. Gary Black, co-founder of investment advisory firm Future Fund Advisors, opined that “Tesla needs a $25,000 compact car to compete with already available low-cost electric vehicles in the market. Increasing the number of robo-taxis at this point would be incredibly risky.”

JP Morgan analyst Ryan Brinkman recently warned clients in a memo that Tesla’s stock could fall even further if the company fails to quickly regain sales volume and revenue growth.

Bloomberg noted that Tesla’s stock could see a short-term rebound due to bargain hunting. Adam Shapiro, CEO of investment firm Fifty Park Investments, stated, “As long as Tesla’s stock stays above the $150 to $160 range, it is technically finding a bottom.”

However, Bloomberg emphasized that for Tesla’s stock to sustain a recovery, the company must demonstrate a return to robust growth, high profitability, and groundbreaking innovation, as it once did. David Mazza, Chief Strategy Officer at Roundhill Investments, said, “It’s challenging to call a bottom at this stage because there is no clear catalyst.”