Tesla’s (TSLA) robotaxi may reshape the auto market, Piper Sandler stated.
In a brand new be aware to shoppers, the agency reiterated its bullish stance, citing Tesla’s pioneering work and first-mover benefit in self-driving software program. “Tesla remains to be probably the most transformative firm in autos,” analysts led by Alexander Potter wrote. “Over time, Tesla will seemingly win.”
The report additionally warns that as self-driving tech scales, the broader auto market is liable to main disruption, together with fewer autos offered, greater utilization of fleets, and a shift towards service-based income fashions. Piper Sandler stated Tesla may develop into a consolidator and recognized no different winners within the house.
Tesla just isn’t the primary participant within the autonomous race. Google’s (GOOG, GOOGL) Waymo launched its driverless taxis in Phoenix in 2018 and now operates fleets in San Francisco, Phoenix, Los Angeles, and Austin. Amazon’s Zoox started testing on public roads in 2023. Tesla opened its robotaxi service to restricted riders in Austin this Sunday.
The corporate additionally has a number of rivals in China. Baidu (BIDU) launched its robotaxi fleet in 2022 and reportedly has plans to increase in Europe.
Piper Sandler analysts stated different US automakers are falling behind as the way forward for mobility evolves. GM (GM) and Ford (FORD) are nonetheless lagging on software program, whereas Rivian (RIVN) faces execution dangers. Stellantis (STLA) has the “steepest hill to climb” with supervisor turnover and geographic complexity.
“Every firm has execs and cons, however none seem as well-positioned as TSLA,” they wrote.
Nonetheless, the agency is lifelike concerning the highway forward. It stated Tesla’s Q2 outcomes may disappoint and a robotaxi crash may dent the corporate’s lofty valuation, including that such an occasion “seems inevitable.” GM’s Cruise shut its robotaxis operations after one in all its vehicles struck a pedestrian in San Francisco in 2023.
Tesla’s gross sales have been sagging because the demand for EVs slows and CEO Elon Musk’s politics fueled boycotts and demonstrations worldwide. For its first quarter, Tesla’s income of $19.34 billion and EPS of $0.27 each broadly missed Wall Road expectations of $21.43 billion and $0.44, respectively.
Its Q1 adjusted income fell 40% yr over yr. Its automobile supply of 336,681 items was the worst because the second quarter of 2022. Its new automotive gross sales in Europe have fallen for 5 straight months in 2025, down 27.9% yr over yr in Might.
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However Piper Sandler argues that Tesla’s lead in autonomy is barely rising as full self-driving (FSD) rolls out in additional cities and the Trump administration doubtlessly points extra favorable insurance policies.
