Tesla Shares Drop 9% After Cybercab Robotaxi Reveal ‘Underwhelms’ Investors
Tesla’s stock took a significant hit, falling nearly 9% on Friday after the company’s highly anticipated robotaxi event failed to excite investors. CEO Elon Musk unveiled the Cybercab concept vehicle—a futuristic, self-driving car—during the event but offered little in terms of near-term growth prospects for the company.
The Cybercab Reveal
At the “We, Robot” event, Musk showcased the Cybercab, a sleek, silver two-seater with no steering wheels or pedals, fully designed for autonomous driving. Musk highlighted Tesla’s ambition to lead the future of transportation by creating a fleet of autonomous vehicles, starting with the Cybercab, which he hopes will be available for purchase before 2027. The projected price for this self-driving vehicle is set to be under $30,000, aiming to make it affordable for a wider consumer base.
However, the lack of concrete details—such as where the Cybercab will be manufactured and when mass production will begin—left investors underwhelmed. Musk’s announcement of Tesla’s Full Self-Driving (FSD) software being rolled out in Texas and California in 2025 did little to reassure investors, as the technology still requires human supervision.
Market Reaction
Tesla shares closed at $217.80 on Friday, marking a 12% decline year-to-date and a 17% drop over the past 12 months. The sharp drop in stock price indicates that investors had expected more substance from the event, particularly updates on Tesla’s FSD technology and details on its autonomous vehicle strategies.
Analyst Reactions: Skepticism Abounds
Wall Street analysts were quick to express their disappointment. A note from Barclays analysts emphasized that the event failed to provide any short-term growth opportunities for Tesla, instead focusing on Musk’s long-term vision of a fully autonomous future. They noted the absence of updates on Tesla’s FSD progress or data showing improvements in the system.
Similarly, analysts at Piper Sandler remarked that the Cybercab unveiling was unlikely to satisfy “trading-oriented firms” that had been banking on more immediate milestones. Analysts at Morgan Stanley were also critical, pointing out that Musk didn’t make a compelling case for Tesla as an artificial intelligence (AI) company. They highlighted a lack of details regarding the ride-sharing economics, FSD advancements, and no mention of a rumored collaboration between Tesla and Musk’s AI venture, xAI.
The Cybercab’s Economic Viability
Beyond concerns about Tesla’s autonomous driving technology, experts are questioning whether a sub-$30,000 price point for the Cybercab is realistic. Forrester analyst Paull Miller expressed skepticism, stating that it would be “extremely difficult” for Tesla to deliver a vehicle at that price without substantial subsidies or suffering losses on each unit sold. He added that economies of scale may eventually reduce costs, but launching a Cybercab at $30,000 within the next few years seems unlikely.
Competitive Landscape and Future Challenges
Tesla’s foray into the robotaxi space is not without competition. Alphabet’s Waymo has already rolled out a public robotaxi service, operating successfully since June. The gap between Tesla’s vision and its competitors’ tangible progress is another reason analysts and investors are showing caution. While Tesla continues to push its long-term autonomous ambitions, regulatory challenges, safety concerns, and technological advancements will be crucial factors determining when—or if—Tesla’s fully autonomous vehicles will hit the streets.
The underwhelming reception to Tesla’s Cybercab event reflects a broader sentiment of impatience among investors and analysts. While Musk’s grand vision of autonomous driving continues to captivate, the market is hungry for near-term updates and concrete milestones. As Tesla navigates increasing competition and regulatory hurdles, the next few years will determine whether the company can maintain its position as a leader in the autonomous vehicle race.
