RBC Capital Markets lowered its price target on Tesla, Inc. (NASDAQ:TSLA) from $293 to $227 Thursday, based on a lower robotaxi segment valuation. Another analyst sees Tesla's upcoming Robotaxi day boosting a competitor.
Robotaxi Valuation Adjustment: RBC Capital assigned a $414 billion valuation to Tesla's robotaxi segment, down from $627 billion previously. The research firm pointed to its lower robotaxi pricing assumption of 81 cents per mile, down from 96 cents per mile, as the first factor in its reduced valuation.
Analyst Tom Narayan also pointed to a larger revenue share going to service providers, like Uber and Lyft, as another factor in its lower Tesla robotaxi expectations. Narayan predicted that widespread adoption of robotaxis will occur closer to 2040 with multiple software providers, fleet operators and OEMs producing purpose-built autonomous vehicles.
The analyst now sees four potential scenarios for how Tesla ends up generating revenue from its robotaxi initiative.
- Tesla owns and operates its own robotaxi fleet
- A fleet operator uses another automaker's vehicle, but taps Tesla for software and an app
- A fleet operator uses Tesla's vehicle and software, but another service provider's app
- A fleet operator uses another automaker's vehicle and a service provider's app, but uses Tesla's software
"Given our revenue share allocations, Tesla achieves 100%, 35%, 25%, and 10% revenue shares across our four scenarios, respectively," Narayan said.
Despite the lowered expectations, RBC Capital still sees robotaxis as Tesla's biggest valuation driver at 52%, followed by full self-driving at 27%, megapacks at 15% and cars at 6%.
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Tesla's Robotaxi Day: Tesla CEO Elon Musk has already announced that the EV maker will unveil its highly-anticipated robotaxi on Aug. 8.
BofA Securities on Thursday said it expects the hype surrounding Tesla's Robotaxi day to reignite interest in the autonomous vehicle market, particularly in Alphabet Inc's (NASDAQ:GOOG) (NASDAQ:GOOGL) autonomous vehicle segment, Waymo.
In a new note, BofA explained that Waymo has achieved Level 4 autonomy with over 7 million autonomous vehicle miles since its launch in 2018 while several competitors have retooled or exited the market. The firm also highlighted the company's progression to 50,000 paid trips per week and planned expansion in California and Texas.
"We reviewed Waymo's progress and opportunity, which could see renewed investor focus around Tesla's Robotaxi day scheduled in August," BofA said in its research note.
As Tesla prepares to unveil its robotaxi, it appears analysts and investors will be watching to see how the EV maker approaches revenue share and if other autonomous vehicle players stand to benefit from the increased focus on the transformative technology.
TSLA, GOOGL Price Action: According to Benzinga Pro, Tesla shares were down 2.62% at $180.09, while Alphabet shares were up 0.56% at $177.44 at the time of publication Thursday.
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