Tesla’s Shift to Robots Risks Losing Focus on EV Sales, Long-Time Investor Warns

Tesla may be making a critical mistake by shifting its focus to robotaxis and robots, as pointed out by long-time investor Ross Gerber. According to Gerber, this strategy is flawed considering that electric vehicle (EV) sales account for the majority of Tesla's revenue. He also predicted that Tesla's Cybercab won't be hitting the streets until at least 2028.

Concerns Over Strategy Shift

Gerber expressed doubts about Tesla's emphasis on full self-driving cars and robots, highlighting that the company heavily relies on revenue from EV sales. By pivoting towards robots, Tesla risks neglecting its core business, which currently contributes to 95% of its revenue.

Competition and Design Criticism

Gerber highlighted the competition Tesla faces in the autonomous driving sector, particularly from established players like Waymo. He also criticized the design of Tesla's Cybercab, suggesting that the model should have included a retractable steering wheel to enhance its market appeal.

Challenges with Self-Driving Cars

Gerber raised concerns about the effectiveness of Tesla's self-driving cars compared to competitors like Waymo. He emphasized the importance of autonomous vehicles being able to operate seamlessly without constant human intervention.

Uncertainties with Robot Development

Gerber questioned the practicality and demand for Tesla's humanoid robot, Optimus, stating doubts about its independence and consumer appeal. He also expressed reservations about having such robots in households.

Financial Outlook and Investor Sentiment

Gerber predicted that Tesla may offer further price discounts to boost sales, potentially impacting its profit margins. Despite acknowledging Tesla's superior car quality, he noted that financial incentives are often necessary to drive sales.

Gerber's evolving stance on Elon Musk and Tesla, along with his investment decisions, indicate a growing concern about the company's direction and image. His recent reduction in Tesla shares reflects a cautious approach towards his investment in the company.

As Tesla navigates its shift towards robots and autonomous vehicles, it faces challenges in balancing innovation with its core business of EV sales. Gerber's insights shed light on the risks and opportunities associated with Tesla's strategic decisions in the evolving automotive landscape.

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By: jsor@businessinsider.com (Jennifer Sor)
Title: Tesla’s Shift to Robots Risks Losing Focus on EV Sales, Long-Time Investor Warns
Sourced From: www.businessinsider.com/tesla-stock-robotaxi-cybercab-tsla-fsd-elon-musk-ross-gerber-2024-10
Published Date: Mon, 14 Oct 2024 14:35:37 +0000