The stakes are high for Tesla stock as the tech giant prepares to host its much-anticipated robotaxi reveal event on Thursday. But analysts also are warning that the event could trigger volatility with two other well-known stocks: Uber and Lyft.
"While Uber and Lyft investors are up to speed on the autonomous vehicle risks from a first-party player like Tesla, we see potential for dislocation with the magnitude depending on the depth & detail Tesla's CEO gives around regulatory approval, launch timing, pricing, supply & demand acquisition strategies and liability exposure," RBC analyst Brad Erickson told clients Monday.
RBC rates both Uber stock and Lyft a positive outperform. Erickson wrote that he expects both companies to serve as demand generators for autonomous vehicles. But he also acknowledged that the event will likely impact Uber and Lyft shares in some way.
"Bracing for impact – but opportunistic buyers on weakness," Erickson wrote.
Why Tesla Matters To Uber Stock
Tesla hyped its Oct. 10 event, called "We, Robot," as revealing the "future of autonomy." Analysts expect it will detail plans for a robotaxi-type service. Tesla leader Elon Musk has previously stated his vision as offering an Airbnb-meets-Uber style service.
The specter of a well-capitalized competitor entering the ride-hailing space has weighed on shares of Uber and Lyft since Tesla teased the event in April. Uber stock gained 24% in the first three months of the year but slumped in the weeks after. Recent momentum has Uber trading just under highs from March. Lyft shares, meanwhile, gained 28% in the first quarter and are down 35% since.
Some Tesla analysts are warning that the event could struggle to live up to the hype. A full-scale robotaxi service is likely still well off. The Google-backed AV company Waymo is considered the industry leader but is offering robotaxis on a commercial basis in just three U.S. cities.
The reaction for Uber and Lyft stock likely comes down how much detail Tesla's presentation provides, Erickson wrote.
"Aside from Tesla likely showing prototype AV's complete with demonstration, we'd expect it to announce a test launch of its AV ride-hailing service in (one to two) cities, potentially as soon as 6-12 months," Erickson wrote. "In particular, we'd expect Musk to make a compelling presentation with its technology positioned as the foundation and moat, Tesla with the ability to underwrite investments necessary to stand up the products and service and lastly, Musk with an unrivaled ability to generate demand."
Uber Strikes AV Partnerships
Meanwhile, Uber has reached several partnerships with AV operators to put robotaxis on its platform, including an expanding deal with Waymo that will soon put the company's robotaxis on Uber's app in Austin and Atlanta, joining Phoenix.
Uber stock analysts have been positive on the deals overall.
"While we are still in the very early innings of widespread AV adoption, we believe Uber should be a long-term winner," Truist analyst Youssef Squali wrote to clients Monday. "That said, Tesla's robotaxi announcement later this week remains a potential overhang on the stock, in our view."
Lyft, meanwhile, has not announced any recent partnership with autonomous vehicle developers but has similar aims.
"Our role is going to be: How do we welcome as many autonomous vehicles (as possible) onto the platform in a hybrid form?" Lyft Chief Executive David Risher said at a September Goldman Sachs conference.
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