Another stunning “triumph” from Elon Musk as his highly hyped robotaxi product launch failed to impress investors—many of whom had believed he would achieve a marketing coup at Thursday night’s event.
Instead, it was more of the same from Musk, according to reports from the Hollywood launch: long on hype, short on details.
The Financial Times Lex column, the most widely read financial analysis column globally, described Tesla and Musk’s robo plan as "all destination and no roadmap," adding that “skepticism about Musk’s robotaxi pledges is justified.”
As a result, Tesla shares lost nearly 9% on Friday and more than 12% for the week, reversing the recent run-up on speculation about the launch.
Currently, Tesla shares are down 12% for the year—much better than the 30% slide seen four months ago, but still far from the 22% rise of the S&P 500.
Musk revealed Tesla’s Cybercab self-driving concept car—a low, silver two-seater with no steering wheel or pedals.
Analysts scoffed at the idea of a two-person, low-slung “taxi” with no room for luggage.
They also pointed out that two-seat vehicles are not popular in the U.S., accounting for only 2% of car sales, excluding SUVs and trucks.
The design seems to rule out older customers and those with disabilities—something that is not legally permissible.
At Tesla's “We, Robot” event, Musk also discussed the company’s ambitions to create a fleet of autonomous vehicles and robots, speaking for 20 minutes when remaining silent might have been more effective.
Musk stated that the company hopes to produce the Cybercab before 2027 but provided no details on where the cars will be manufactured. He mentioned that consumers could purchase a Tesla Cybercab for under $30,000.
The best verdict came on Friday when shares in Uber rose 10.8%, and its rival Lyft jumped nearly 10%.
In fact, Uber shares were the best performers in the S&P 500 on Friday, while Tesla was the worst.
Some analysts had viewed both companies as potential victims of Musk’s robotaxi ambitions, but not anymore.
After the event, analysts at Jefferies published a note titled, “We, Underwhelmed.”
Meanwhile, Barclays analysts noted that the revelations failed to highlight any near-term opportunities for Tesla, instead prioritizing Musk’s vision for a fully autonomous driving future.
“As expected, like previous Tesla product unveils, the event was light on details and instead emphasized the vision underpinning Tesla’s growth endeavors in AI/AV [autonomous vehicles],” Barclays analysts wrote.
They added that the public didn’t “receive any near-term updates on FSD progress or data reflecting improvement in the system.”
Piper Sandler analysts wrote in a report that “most trading-oriented firms will be underwhelmed by the robo-taxi unveiling.”
“We wouldn’t be surprised if the stock sells off in the coming weeks, as pre-event momentum fizzles,” the analysts stated.
Morgan Stanley analysts remarked that Musk failed to make the case that Tesla is an artificial intelligence company during the event.
They noted that Musk didn’t offer any details on improvements to Tesla’s FSD system or comment on rumored plans for a tie-up between Tesla and xAI, Musk’s AI company.
Paul Miller, an analyst at Forrester, told CNBC in an email on Friday that a $30,000 Cybercab isn’t coming anytime soon.
“It will be extremely difficult for Tesla to offer a new vehicle at that price within that timescale,” Miller said. “Economies of scale might eventually allow the company to reduce costs to something close to $30,000. Without external subsidies or Tesla making a loss on every vehicle, it doesn’t seem plausible to launch at anything close to that price this decade.”
In his launch, Musk also stated that he expects Tesla to have “unsupervised FSD” operational in Texas and California next year for the Model 3 and Model Y electric vehicles. FSD, or Full Self-Driving, is Tesla’s premium driver assistance system, currently available in a “supervised” version for Tesla electric vehicles.
The technology still requires a human driver at the wheel, ready to steer or brake at any moment—something Musk failed to mention or explain how he and the company would address in order to implement unsupervised self-driving next year.
Compared to the self-driving technology used by similar vehicles from GM, Google, and Chinese rivals, Musk’s offering is lacking in fail-safe technologies.
In addition to the Cybercab, Musk announced plans to produce an autonomous electric Robovan that can carry up to 20 people or be used for transporting goods. He claimed it will “solve for high density,” such as transporting a sports team.
The reasoning behind this hype was not explained, and analysts noted that they had seen little to no demand for EV-based large-capacity passenger vans.
