Guosen Securities APP learned that on Thursday, October 10th at 19:00 local time (10:00 on the morning of the 11th in Peking 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 an autonomous taxi network, mentioning a fleet of automatic Tesla vehicles. The next major update occurred in 2020, when the CEO stated that the autonomous taxi would be launched in 2023 and put into production in 2024, but this did not materialize.

However, on Thursday, after yet another delay, Tesla appears to be ready for Musk's "product release" of Robotaxi. Whether it will be a success like the 2012 Model X launch or a failure like the 2021 Tesla Optimus robot, remains unknown to those without insider information.

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

Deutsche Bank analysts have given Tesla a "buy" rating with a target price of $295, expressing optimism about this event. However, they also acknowledge that high expectations may lead investors to "sell the news" after the event.

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

New product

The nicknamed Cybercab autonomous taxi is expected to be Tesla's first driverless car. Currently, the company's electric cars still require a driver to provide partial autonomous driving functions through its driver assistance software.

Tesla's Full Self-Driving software (FSD) and Autopilot have always been the root of controversy and many issues for Tesla, from long legal battles to accusations of false advertising. The U.S. National Highway Traffic Safety Administration has reviewed 956 initial reported crashes involving the use of Autopilot, with over thirty investigations initiated concerning accidents involving Tesla's software.

It is reported that the Cybercab is expected to be equipped with two front seats and gullwing doors, matching the concept image recently written for Musk by Walter Isaacson in his biography.

Musk had previously joked that his team would 'show some other things' on Thursday, leading some to associate it with the three 'mystery cars' mentioned 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 is hoping to see a prototype of Robotaxi and previews of other vehicles.

Competitive environment

Although Tesla is not unfamiliar with artificial intelligence or autonomous driving, it will still lag behind some competitors. Companies like Google's Waymo have been operating self-driving cars for years, collecting data and facing fewer controversies compared to Tesla.

GraniteShares CEO Will Rhind said, "Waymo has taken a clear lead, providing thousands of autonomous driving services per week in several major cities, Amazon's Zoox is scheduled to make its first appearance next year. In the field of autonomous taxis, they do not have a first-mover advantage, if they need a year or longer to officially launch services, this may come at a high cost."

Tesla must also provide highlights that are attractive to regulators and the general public, as they still largely hold a skeptical view of autonomous vehicles. GLJ Research analyst and Tesla critic Gordon Johnson pointed out that the Thursday event will take place on many private roads, partly because Tesla has not yet applied to the California authorities for deployment permits.

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 when it comes to collecting data. Tesla's data center has recorded data on FSD for over 1.5 billion miles.

Ives said about this event, "Clearly, the industry/investors want to hear many responses to obstacles and issues, including: insurance, vehicle costs, time, regulatory approval timeline, and overall operation."

Wedbush reiterated Tesla's 'outperform the large cap' rating with a target price of $300, and stated that they 'still think Tesla is the most undervalued and seriously AI company in the market', and believe that the launch of Robotaxi is a 'pioneering and historic day' in its history.

Business Model

In June this year, Musk put forward 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 make 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 make."

Tesla will receive some revenue from this potential service - although analysts say this may take a few years - with the remaining revenue going to the vehicle owner. The final launch time of Tesla's network is still unclear, and investors are hoping Musk will provide detailed information on Thursday.

JPMorgan analysts stated in June that they do not anticipate substantial revenue in the coming years. Ronald Jewsikow of Guggenheim Securities said, "A truly reliable path to the commercialization of Robotaxi is highly unlikely to emerge in the next 12 to 24 months."

Ark Invest predicts that by 2029, autonomous taxi services will account for 90% of Tesla's market cap, with Tesla's stock price rising to around $3100 per share. If the network is not operational by that year, their 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 adjust their estimates of how Robotaxi will impact Tesla's profits. She expects the company's gross margin to reach 80%.

"For Tesla, it's not a question of if, but when. For Tesla, another question is how quickly they will launch?" Wood said, "At what speed will they push their ambitions nationwide, even globally?"