The Tesla (NASDAQ:TSLA) share price is known to be volatile. It’s surged 11% over the past week. Over the past year, the stock’s doubled. Investors are keenly watching out for an important event next month, which promises to help set the stage for another large move in the stock price.
Back to the future
I’m referring to the highly anticipated robotaxi service launch, which will take place in Austin, Texas, at the beginning of June. This pilot programme marks a significant step toward the company’s vision of a fully autonomous ride-hailing network. The service will commence with a limited fleet of a dozen or so modified Model Y vehicles. But if things go well, it’ll likely speed up the process of rolling out the service to other areas of the US.
This launch represents a pivotal moment for Tesla as it’s the first proper venture into autonomous ride-hailing services. The Austin pilot will serve as a critical testbed for its technology and operational model. Of course, those at Tesla will be watching closely, as will investors, as it could really impact the trajectory for the stock going forward.
Stock impacts
A rally could result from positive results following no major problems in the pilot. This could show that the project can be rolled out faster, increasing the revenue opportunities for the business.
It also would set the scene for the Cybercab next year. The company plans to introduce it as a purpose-built autonomous vehicle. Part of getting this going will depend on how well the robotaxi launch goes this year.
On the other hand, the share price could fall if major issues are revealed. Not only could the stock suffer from reputational damage (any problems would certainly get a lot of publicity), but it could result in having to go back to the drawing board, resulting in higher costs.
Potential concerns
I don’t believe Elon Musk and the management team would be going ahead with the pilot unless they were confident in it being a success. From that perspective, I think the stock could get a boost from the launch. This short-term pop is great, but it’s important to remember that this is just one part of the overall business.
The company is still struggling with poor sales figures both domestically as well as in regions like Europe. A glitzy product launch alone won’t solve this problem overnight. However, if coming months build on the potential pilot success, it could help to turn the tide and become a meaningful contributor to group sales.
On that basis, I’m seriously thinking about adding the stock to my portfolio ahead of June in order to benefit from the potential success of the event.
