For the past several weeks, amid a flurry of positive developments in the self-driving industry, we have been pounding the table on autonomous vehicle stocks.
Indeed, just consider: Waymo is already delivering 100,000-plus autonomous rides per week throughout Phoenix, San Francisco, and Los Angeles. And it’s set to expand to Austin, Texas and Atlanta, Georgia within the coming months. Baidu’s Apollo Go is also apparently delivering around 100,000 autonomous rides per week in various cities throughout China and is looking to aggressively expand as well.
In Texas, Aurora and Kodiak Robotics aim to put their driverless trucks on public roads to autonomously haul freight by the end of the year. And in Arizona, Uber Eats is tapping Waymo to autonomously fulfill some online food delivery orders.
And last week, it was Tesla’s turn in the spotlight. At its “We, Robot” event on Oct. 10, the automaker finally unveiled its self-driving cars, the Cybercab and Cybervan… and the market was left largely unimpressed.
Since that reveal, Tesla stock has dropped about 10%.
It seems Musk’s disappointing debut let a lot of air out of investors’ tires. As we’ve mentioned before, the long-running joke has been that self-driving cars are ‘five years away from being five years away.’ And last week’s nebulous “We, Robot” event seems to have solidified that thinking for many.
But here’s the twist: this may actually be the perfect moment to double down on AV stocks.
Despite Tesla’s lackluster debut, self-driving cars are here – and they’re set to transform our world over the coming years.
Tesla’s Reveal: Style vs. Substance
Now, we aren’t saying this as relentless Tesla stock bulls, either.
Yes, we are bullish on TSLA. But we, too, walked away from the company’s robotaxi reveal with mixed feelings.
The company just didn’t provide much detail about its new products.
Reportedly, the Cybercab will cost less than $30,000. But Tesla is still struggling to make a non-autonomous car for less than $30,000. So, without further details, we find that price point hard to believe.
Additionally, Cybercab production was promised by 2027… but there was no discussion of what’s being done right now to prepare for that. And considering Musk’s history of being overly optimistic about production timelines, perhaps 2028 or 2029 would be a more realistic expectation here. That is still a long way off.
Not to mention, no technical details about Cybercab or Cybervan were discussed. No timeline was provided for Optimus’ launch. And while certain demonstrations were impressive – Tesla’s robots were seen having full conversations with guests, playing rock-paper-scissors, and pouring drinks – rumors have been swirling that the bots were actually being teleoperated at this event.
Self-Driving Is Still the Future
Perhaps most confounding, Tesla also said it expects to roll out full-self-driving capabilities to current Tesla cars in Texas and California next year, pending regulatory approval – but no updates were given on that approval process.
So… yes… the event lacked significant detail… on pretty much everything… and that’s why the negative reaction in TSLA stock makes sense.
However, despite its obscurity, we believe Tesla’s event provided a solid foundation for long-term success in AV stocks.
After all, the company did unveil two different autonomous vehicles and drive event attendees around in those cars. It did say those vehicles are coming soon and that its other cars will be fully autonomous in the near future as well.
Details surrounding its business execution and timeline were clearly lacking. But the substance was there. The future was on display.
And that future is one where autonomous cars take over roads all across the world.
The Final Word
So, no, we do not think Tesla’s “lackluster” reveal killed the bull thesis on AV stocks. Rather, we think it bolstered the bull thesis.
Just look at Uber stock.
That company has positioned itself as the network provider for autonomous vehicles. Companies like Waymo are partnering with the firm to deliver autonomous rides. And since Tesla’s event last week, UBER stock is up more than 10% and has rallied to record highs.
It isn’t alone.
Aurora, the autonomous trucking company working to roll out self-driving 18-wheelers in Texas and Arizona, is also up since Tesla’s event.
The same is true for Mobileye, which provides a variety of tech solutions for autonomous and semi-autonomous cars; Alphabet, owner of Waymo; and Ambarella, another player in the AV space.
So… while Tesla stock has crashed 10% since the company’s disappointing product reveal… most other AV stocks are up.
Clearly, the Autonomous Vehicle Revolution is still very much alive and well.
We still think these stocks are primed to soar in 2025 and beyond.
But they aren’t the only “applied AI” stocks with a bright outlook over the next few years.
Learn about a few strong AI stocks we’ve set our sights on recently.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
P.S. You can stay up to speed with Luke’s latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.