Tesla’s stock experienced a significant decline, plummeting over 7% during midday trading on Friday as investor enthusiasm waned following the company’s anticipated robotaxi launch.
During an event on Thursday night, Tesla showcased its latest initiative, the Cybercab, aiming to solidify CEO Elon Musk’s reputation as a frontrunner in artificial intelligence. However, the outcome was met with a wave of skepticism rather than excitement regarding Tesla’s ambitious vision for the future of driverless services.
Analysts from Jefferies labeled the newly introduced $30,000 robotaxi as a “toothless taxi,” expressing doubts about the feasibility of Tesla’s grand ambitions. They pointed out that the company may be underestimating the hurdles it faces in establishing a widespread robotaxi fleet.
The Cybercab is notably designed without a steering wheel or pedals, intended for complete autonomy. According to reports from Yahoo Finance, Tesla plans to initiate unsupervised full self-driving (FSD) trials with its Model 3 and Model Y vehicles in Texas and California next year. Musk indicated that production for the Cybercab could commence as early as 2027.
The latest drop in Tesla’s shares marks a continuation of a two-week downward trend. The company already saw its stock dip following disappointing third-quarter delivery figures, a recall announcement, and the discontinuation of a budget-friendly model. Although shares are down by 17% year-over-year, the current pricing at around $220 remains above the lows seen earlier this spring, when they fell below $140, coinciding with layoffs and price reductions.
Expectations were high for the robotaxi event to meet the previously set hype, but many analysts were left unsatisfied with Musk’s vague approach regarding how the company intends to fulfill its ambitious roadmap.
Raymond James analyst Josh Beck criticized the plan for Cybercab commercialization as lacking clarity and detail, while Morgan Stanley noted a “disappointing lack of detail” related to Tesla’s FSD technology and market strategies.
Although some Wall Street experts viewed the event positively, with Bank of America describing it as living up to the hype, many others echoed concerns regarding a deficiency in substantial data and timelines. Analyst Dan Ives from Wedbush contended that the event provided a glimpse into the future of Tesla and next-generation consumer transportation, highlighting the presence of the humanoid robot Optimus.
In parallel, the overall lukewarm response to the robotaxi launch bodes well for established ride-hailing competitors like Uber and Lyft. Shares of both companies surged by about 10% on the day of the event, as the uncertainty regarding Tesla’s service clarity may alleviate immediate competitive fears.
Wall Street remains divided on Tesla stock, with 26 analysts recommending a buy, 20 suggesting a hold, and 15 advising a sell. Analysts predict shares could fall to approximately $216.59 over the next year, according to consensus data from Bloomberg.
As Tesla navigates this phase of skepticism mixed with high expectations, the market will be watching closely to see how the company responds and strategizes for the future in the increasingly competitive EV landscape.