Tesla CEO Elon Musk is a 'charismatic' CEO, but yet to deliver on big promises, analysts say

HSBC analysts said Tesla CEO Elon Musk is an "asset" with a "cult-like following" but their primary concern is the timeline of him delivering on promises.

• Elon Musk must deliver on ambitious Tesla projects to justify its stock price, HSBC analysts said.
• The analysts said in a November report cited his charisma and noted his "cult-like following."
• Musk has made big promises including to release its humanoid robots and building a supercomputer.

Elon Musk's grandiose ideas for Tesla must come to fruition to justify its high-priced stock, HSBC analysts said. 

In recent years, the company has made bold pledges related to its plans for humanoid robots, a supercomputer, and fully self-driving cars.

"Arguably, the ideas need to become reality to support the current share price," the analysts said in their November report seen by Insider. 

In other words, Musk is yet to deliver on his big promises.

Musk previously said he was "very confident" that Tesla would be able to dispatch their cars as robotaxis by 2020. The EV maker is yet to gain regulatory approval for its Full Self-Driving Capability software, which has remained in beta since it was rolled out in 2020.

Last year at Tesla's AI day, Musk made a bold prophecy that the company could be able to take orders for its humanoid robots, named Optimus, in three to five years, per Reuters. 

The CEO didn't provide any meaningful updates on its progress in Tesla's third-quarter earnings call last month. He simply told investors: "Optimus, a year ago, could barely walk and now it can do yoga. So, a few years from now, it can probably do ballet."

In its second-quarter earnings, Tesla said it had started production of Dojo, its supercomputer that it will use to train its autonomous vehicle software. Musk said in July in an investors call that Tesla plans to invest $1 billion into developing Dojo over the next year. 

"Significant delays or developments that show lack of technological and/or regulatory feasibility for a commercial launch of these projects pose a significant risk for Tesla," the HSBC analysts said in their note. 

Delivery was the analysts' "primary concern," per their note, and although they believed Musk posed a risk, they also described him as an "asset."

The caution around his "risk," stemmed from the uncertainty around the timing and commercialization" of the company's varied ideas, the analysts said. "We see considerable potential in Tesla's prospects and ideas, but we think the timeline is likely to be longer than the market and valuation is reflecting. Hence the 'reduce' rating," they added.

Tesla was this week given a "reduce" rating, with a $146 price target.

Musk is a "charismatic CEO with a cult-like following," the analysts said, adding that he also "feeds into the innovator narrative."

Tesla didn't immediately respond to Insider's request for comment, made outside of normal working hours.