Apparently, Tesla (Nasdaq: TSLA) CEO Elon Musk wasn’t always keen on putting robots into the production arena. However, Musk now appears ready to accept and even embrace the automation revolution. He’s even preparing to unveil a robotics project with implications far beyond the auto industry. It’s a risky proposition, sure, and yet I’m optimistic about the Tesla stock.
Electric vehicle manufacturer Tesla is known as much for its controversial CEO as it is for its stylish and powerful cars and trucks. Musk pioneered, or at least popularized, the vehicle electrification movement in America.
Now, however, he is preparing to expand into a new but related business venture. Thus, Tesla stock investors will need to be aware of Musk’s evolving vision of what production of electric vehicles should look like — and who (or more accurately, what) will make the clean energy cars of today and tomorrow.
Tesla investors must mark their calendars on September 30th
Brace yourself, Tesla shareholders, because September 30th is going to be an unforgettable day. No, it’s not an earnings report or even a new car release. It could actually be more impactful than any recent Tesla event, as AI Day could reveal the future course of the company, and automation technology in general.
On that day, Tesla plans to unveil a prototype of the company’s project known as Optimus (most likely, a reference to transformers movie series). Optimus is designed to be a labor-saving robot with applications in Tesla’s production plants, but possibly also in people’s homes someday.
Typically, Musk teased Optimus development with a tweet, writing that the Tesla “autopilot/artificial intelligence” team is working on a robotics project. This tweet, which hinted at a deadline at the end of the month, garnered thousands of likes and hundreds of retweets. Moreover, Musk has been reported that he may start production of Optimus next year.
This appears to represent a shift in Musk’s sentiments toward robotics. Just four years ago he blamed reliance on factory robots for sending Tesla into “production hell” four years earlier. At the time, Musk declared that humans are better than robots at certain jobs.
This is certainly true, but today the CEO of Tesla is willing to give bots a chance to prove their worth, and is even championing bots as a future-facing technology. Last year’s Artificial Intelligence Day saw a dancer in a robot costume and a Musk discuss autonomous driving technology. We hope this year’s event will provide not only spectacles to capture the attention of the press but also a deeper insight into Musk’s vision of Optimus in and out of Tesla’s giant factories.
Optimus Robots Can Help Address Labor Shortage
It’s no secret that in America and elsewhere, companies are having trouble filling essential job positions. Automakers are certainly no exception, and Musk is positioning Optimus to be a solution to Tesla’s talent acquisition problems, while also suggesting that robots could help solve problems faced by companies across the economy.
At the very least, robots will be cheaper than humans – or at least that’s what Musk asserts. It is conceivable that using robots instead of human labor could cut the cost of a Tesla car — any other car, or a variety of other products — by 30% or even 50%.
This idea won’t make Musk popular with some human robot workers, but it’s no surprise that Tesla and other companies can achieve cost savings through the use of robots, while tackling America’s severe labor shortage. Musk even hypothesized that deploying robots like Optimus could “turn the whole idea of what an economy is on its head, at the point where you don’t have a shortage of labour.”
The Tesla CEO continued, “The economy is GDP per capita. If you don’t have capital restrictions, the economy can be arbitrarily huge.” This line of reasoning may or may not stand up to the scrutiny of mathematicians, but Musk’s enthusiasm is undeniably contagious.
Plus, here’s a bombshell: Musk suggested that Optimus “will be more valuable than a car in the long run.” Imagine Tesla eventually evolving from a manufacturer of electric vehicles to a robot maker in the first place.
While you’re at it, also try to imagine Optimus robots venturing outside Tesla factories, making dinner or mowing your lawn. Musk imagines that Optimus will one day do all of these things and more, including caring for the elderly or even becoming a “buddy” for someone who needs a friend.
What is the price target for Tesla stock?
Turning to Wall Street, TSLA has a consensus rating of moderate buy based on 19 buys, six holds, and five identified sells in the past three months. The average price target for Tesla is $310.29, implying a 1.2% upside potential.
Conclusion: Should You Consider Tesla Stock?
If you’re considering buying or even just holding a Tesla stock, you’d better be aware of Musk’s vision for his company’s future. It appears he’s ready to gradually but relentlessly turn Tesla into a robot-first, automobile-type business.
Not everyone agrees with this — but then, Musk’s concept of electric vehicles on America’s roads may have seemed so farfetched 20 years ago. So, the billion dollar question is: Are you ready to run with the bots and join the highly-convinced yet controversial revolution?
Musk has already changed the course of history once, and there’s a good chance he’ll do it again with Optimus — and perhaps humans who invested early in Tesla stocks can get rich while robots do all the work.
The opinions and opinions expressed here are those of the author and do not necessarily reflect the views and opinions of Nasdaq, Inc.