Tesla (TSLA, Financial) investors are eager for CEO Elon Musk to address two pressing concerns: the launch of an affordable electric vehicle and the progress of the robotaxi initiative. Wall Street is hopeful that a cheaper car could revitalize Tesla's declining sales, which have been impacted by competition and boycotts related to Musk's political stance.
Recent reports suggest that Tesla's plan for an affordable vehicle includes a simplified version of the Model Y SUV, but production has been delayed. GraniteShares CEO Will Rhind emphasized that the success of this model is crucial for Tesla's recovery. Amid declining sales, Tesla's profit margins are also shrinking, with analysts predicting a historic low in automotive gross margins for the first quarter.
Musk has shifted focus to robotaxis and AI, promising a driverless service in Texas by mid-year. However, the implementation faces regulatory hurdles and safety concerns. Production of the Cybercab, a key component of the robotaxi plan, may be disrupted due to increased tariffs on Chinese imports.
Investors are also concerned about Musk's time management, given his involvement in government roles. Tesla's brand value has suffered, reflected in showroom protests and increased trade-ins. Despite these challenges, Tesla's Q1 revenue is expected to remain stable, aided by regulatory credits and solar sales.
