Tesla (TSLA 0.58%) is a polarizing stock. When investors are optimistic, shares can quickly soar, but when there are concerns about its financials or growth prospects, it can end up in free fall. This year has been particularly volatile for Tesla, losing more than 40% at times in 2024. While it has recovered, its year-to-date loss is still around 20%.

Whether Tesla ends the year successfully could depend on a key event that is probably even more important than the next earnings report.

The highly anticipated Robotaxi event

Tesla will unveil its robot taxi this year, which could revolutionize the ride-hailing industry. More importantly for the growth stock itself, the event will also show how far Tesla is in developing fully autonomous driving capabilities, which has long been a big question mark. The company is even facing lawsuits over its autonomous driving claims, with many owners believing Tesla misled them into believing that fully autonomous capabilities would soon be available.

Although Tesla’s vehicles have some autonomous driving capabilities, a driver still needs to be present and paying attention to the road. The vehicles are not completely autonomousIf the company can show that it is making progress in developing a fully autonomous robotaxis, it could convince investors and prove its skeptics wrong. The event was scheduled for August but was postponed to October due to a design change.

The poor earnings figures could get even worse

Tesla needs the robotaxi event as a positive catalyst because, unfortunately, business just isn’t going so well. Last month, Tesla reported its second-quarter results. Revenue rose just 2% year over year to $25.5 billion. And as operating costs rose and margins shrank, net profit nearly halved, falling 45% in the quarter.

Competition from Chinese electric car makers has increased, and as other companies work on self-driving vehicles, Tesla is under pressure to show both consumers and investors that its vehicles are worth paying a premium. If the company can’t prove that its self-driving technology has improved significantly, that could put further downward pressure on its margins.

Even if Tesla stock collapses this year, it still trades at 80 times forward earnings. That’s not the kind of premium many growth investors would be willing to pay for a company that’s struggling to grow its revenue. With a market cap of nearly $640 billion, Tesla stock has plenty of room to fall further this year (and beyond) if the company can’t show significant progress in its earnings report or during the October presentation.

Should you buy Tesla shares today?

Given the impending uncertainty, the deteriorating electric vehicle business, and CEO Elon Musk’s tendency to over-inflate expectations, I am currently skeptical of the stock.

A weak economy could put even more pressure on the business. Given what Tesla still has to prove in the rest of 2024, the wisest course for investors is to wait and see.