Barclays said on Monday that Tesla’s launch of its robotaxi service within a geofenced area in Austin was “largely in line with expectations,” as the firm reaffirmed its ‘Equal Weight’ rating on the stock.
Tesla began offering its first driverless rides on Sunday at a flat rate of $4.20 to a select group of influencers, marking the start of its robotaxi service.
In a new research note, Barclays analyst Dan Levy said the launch was “rather uneventful with no major issues” and “largely inline” with the bank’s expectations.
“Yet zooming out, we believe the launch is a matter of perspective,” he noted. “Bulls will point to yesterday’s event as the start of a new era for Tesla, one which bulls and believers have been awaiting for a long time.
Levy reiterated an ‘Equal Weight’ rating and a $275 price target on the stock. Tesla shares closed at $322.05 on Friday, indicating that the firm’s target implies a 14.6% downside.
Levy said that Tesla users who were invited to take the first driverless rides “see the tech working well with a clear path of scaling, and point to Tesla now generating revenue on driverless rides as a critical milestone.”
“Bulls will point to yesterday’s event as just the beginning of an exciting path of growth,” he added.
The analyst defends that fundamentals for the Tesla stock have been “seemingly pushed to the side for now” as the company is expected to report another year over year decline in second quarter vehicle deliveries.
“We appreciate this view, and believe this further reinforces that Robotaxi/AV remains front and center for the stock…with fundamentals seemingly pushed to the side for now (albeit we believe fundamentals don’t matter until they matter),” he stated.
According to Musk, Tesla plans to have “hundreds of thousands, if not over a million Teslas doing self-driving in the US” by the end of next year.
“But we believe the much better question ahead is on the path of scaling, which we believe will be long, and we caution against overoptimism,” he concluded.
Tesla’s initial fleet includes about 10 Model Ys covering a service area roughly five miles in radius across central Austin.
