TLDR:
- Tesla stock dropped up to 10% after its robotaxi reveal event
- Wall Street analysts criticized the lack of details provided about Tesla’s robotaxi network
- Uber and Lyft stocks rallied in response to Tesla’s underwhelming presentation
- Tesla’s Cybercab prototype lacks a steering wheel and pedals, aiming for full autonomy
- Elon Musk suggested Cybercab production could start in 2026, costing less than $30,000
Tesla’s much-anticipated robotaxi reveal event on Thursday evening left Wall Street analysts and investors underwhelmed, causing the electric vehicle maker’s stock to plummet by as much as 10% on Friday.
The presentation, which showcased the company’s vision for autonomous transportation, failed to provide the level of detail and concrete plans that many had hoped for.
During the event, Tesla CEO Elon Musk unveiled the Cybercab, a two-seater autonomous vehicle prototype designed without a steering wheel or foot pedals.
The company also presented a larger Robovan concept capable of transporting up to 20 passengers. Musk indicated that Cybercab production could potentially begin in 2026, with an estimated cost of less than $30,000 per unit.
However, analysts criticized the lack of specifics surrounding Tesla’s robotaxi network, particularly when compared to competitors like Waymo, which already has an operational service.
Wells Fargo analyst Colin Langan noted that the Cybercab demonstrations were conducted in a controlled environment and resembled a “slow and short amusement park ride.” He contrasted this with Waymo’s current operations, which involve hosting 100,000 rides per week in major cities.
Bernstein analyst Toni Sacconaghi described the event as “underwhelming and stunningly absent on detail.” He pointed out that Musk’s vision for autonomy hasn’t changed significantly over the past decade, and investors had expected a more detailed roadmap for achieving these goals.
Sacconaghi also expressed concerns about the potential for outsized profits from a robotaxi network, citing technical and regulatory challenges.
Robotaxi & Robovan pic.twitter.com/pI2neyJBSL
— Tesla (@Tesla) October 11, 2024
The market’s reaction to Tesla’s presentation was swift and significant. While Tesla’s stock price fell sharply, shares of ride-hailing companies Uber and Lyft saw notable increases.
Uber’s stock jumped as much as 7% to reach an all-time high, while Lyft’s stock advanced up to 8.3%. This shift suggests that investors view Tesla’s robotaxi plans as less of an immediate threat to established ride-hailing services than previously anticipated.
Jefferies analyst John Colantuoni referred to Tesla’s robotaxi reveal as a “best-case outcome for Uber,” noting that Tesla failed to provide verifiable evidence of progress toward automated-driving features or quantify its production plans for robotaxis.
Despite the overall negative reception, some analysts maintained a positive outlook. Wedbush analyst Dan Ives disagreed with the notion that the event was a disappointment, arguing that seeing the Cybercab in person demonstrated that “this vehicle is now a reality and not just talk.”
Elon Musk, known for his optimistic timelines, cautioned that he tends to be overly optimistic about project schedules. This acknowledgment, combined with the lack of concrete details, may have contributed to investor skepticism.
The reaction to Tesla’s robotaxi event highlights the challenges faced by companies pursuing autonomous vehicle technology.
While the concept of self-driving taxis holds promise for the future of transportation, investors and analysts appear to be looking for more tangible progress and detailed plans before fully embracing such ambitious visions.
As the autonomous vehicle landscape continues to evolve, traditional ride-hailing companies like Uber and Lyft may find themselves with more time to adapt their business models.
Uber CEO Dara Khosrowshahi recently stated that he doesn’t expect robotaxis to become a significant portion of the company’s fleet for several years, citing ongoing technological, regulatory, and economic challenges.
