All eyes on Tesla! Tesla Robotaxi is about to debut, what key points are worth paying attention to?

According to the financial news app Zhitong Finance, on Thursday, October 10th at 19:00 local time (10:00 on the morning of the 11th Beijing time), Tesla (TSLA.US) will hold an official Robotaxi demonstration event with the theme "We, Robot".

Since at least April 2019, Musk has been talking about developing a self-driving taxi network, mentioning a fleet of autonomous Tesla vehicles. The next major update came in 2020 when the CEO stated that the self-driving taxi would be launched in 2023 and put into production in 2024, but this did not materialize.

After another delay, Tesla seems to be ready for the "product launch" of the Robotaxi as mentioned by Musk. Whether it will be a success like the Model X in 2012 or a failure like the Tesla Optimus robot in 2021, remains unknown to those without insider information.

Therefore, this event will undoubtedly attract the attention of many investors, either bringing great victories or great disappointments.

Deutsche Bank analysts have given Tesla a "buy" rating with a target price of $295. They are optimistic about this event but also acknowledge that high expectations may lead to investors "selling the news" after the event.

Here are the key points that investors should pay attention to at this event.

New Products

The self-driving taxi, nicknamed Cybercab, is expected to be Tesla's first driverless vehicle. Currently, the company's electric vehicles still require a driver-assist software to provide partial autonomous driving functions and need a driver.

Tesla's Full Self-Driving (FSD) software and Autopilot have been sources of controversy and many issues for Tesla, from long legal battles to accusations of false advertising. The National Highway Traffic Safety Administration reviewed 956 initial crash reports involving the use of Autopilot. The agency has conducted over thirty investigations into accidents involving Tesla software.

It is reported that the Cybercab is expected to be equipped with two front seats and gullwing doors. This aligns with concept images in Walter Isaacson's recent biography of Musk.

Musk has previously joked that his team will "show some other things" on Thursday, some linking it to the three "mystery vehicles" included in Tesla's annual shareholder meeting presentation. Reports suggest Musk will also discuss the company's development of FSD and its integration into its Semi truck.

Gene Munster of Deepwater Asset Management stated last week that he expects to see three models, including the rumored self-driving passenger vehicle "Cybervan" and the $25,000 Model 2. Munster hopes to see a prototype of the Robotaxi and previews of other vehicles Competitive Environment

Although Tesla is no stranger to artificial intelligence or autonomous driving, it still lags behind some competitors. Companies like Waymo from Google (GOOGL.US) have been operating autonomous vehicles for years, collecting data and facing fewer controversies compared to Tesla.

Will Rhind, CEO of GraniteShares, stated, "Waymo is far ahead, providing thousands of autonomous driving services in major cities every week, and Amazon's (AMZN.US) Zoox is planning to debut next year. In the field of autonomous taxi services, they do not have a first-mover advantage, and if they need a year or longer to officially launch services, it could come at a high cost."

Tesla also needs to provide highlights that are attractive enough to regulators and the general public, as there is still significant skepticism towards autonomous vehicles. Gordon Johnson, an analyst at GLJ Research and a Tesla critic, pointed out that Thursday's event will be held on many private roads, partly because Tesla has not yet applied for deployment permits from California authorities.

Dan Ives, a Tesla bull and analyst at Wedbush Securities, stated in a report on Wednesday that a positive factor for Tesla is that the company is not lazy in collecting data. Tesla's data center has recorded data on FSD for over 1.5 billion miles.

Ives commented on the event, saying, "Clearly, the industry/investors want to hear responses to many obstacles and issues, including insurance, vehicle costs, time, regulatory approval timelines, and overall operations."

Wedbush reiterated its "outperform" rating on Tesla with a target price of $300, stating that they "still believe Tesla is the most severely undervalued AI company in the market" and that the launch of Robotaxi is a "groundbreaking and historic day" in its history.

Business Model

In June of this year, Musk proposed his vision for the Robotaxi network, calling it a combination of "Airbnb and Uber," as owners can choose to join the service with their cars in their spare time. He also reiterated to Tesla owners that they can earn money from the autonomous driving fleet while sleeping, as the company will call cars through an app to pick up potential ride-hailing customers.

Musk stated at Tesla's annual shareholder meeting, "I am very confident that this will far exceed the value of monthly car payments that customers may need to pay."

Tesla will receive partial revenue from this potential service—although analysts suggest it may take several years—while the remaining revenue will belong to the car owners. The final launch date of the Tesla network is still unclear, and investors are hoping Musk will provide detailed explanations on Thursday.

Analysts at J.P. Morgan stated in June that substantial revenue from this is not expected in the coming years. Ronald Jewsikow of Guggenheim Securities stated, "A reliable path to commercialize Robotaxi within the next 12 to 24 months is highly unlikely." Ark Invest predicts that by 2029, autonomous taxi services will account for 90% of Tesla's market value, with Tesla's stock price rising to $3,100 per share. If the network is not operational by that year, the target price will drop to around $350 per share.

Cathie Wood, CEO of Ark Invest, stated earlier this week that she believes analysts will have to actively revise their estimates of how Robotaxi will impact Tesla's profits, with the company's gross margin expected to reach 80%.

"For Tesla, it's not a matter of if, but when. Another question for Tesla is how fast they will roll out their ambitions," Wood said. "At what speed will they push their vision nationwide, or even globally?"