Tesla unveils its “Cybercab” on October 10, 2024 in Burbank, California.
Source: Tesla
Tesla shares closed down nearly 9% on Friday after the electrical vehicle company’s long-awaited robotaxi event did not impress investors.
CEO Elon Musk unveiled the firm’s Cybercab self-driving concept automotive — a low, silver two-seater, with no steering wheels or pedals — on Thursday night, at the corporate’s “We, Robot” event, and hyped his company’s ambitions to create a fleet of autonomous vehicles and robots.
Musk said the corporate hopes to be producing the Cybercab before 2027, but offered no details on where the cars can be manufactured. He said consumers would find a way to purchase a Tesla Cybercab for a price tag under $30,000.
He also said he expects Tesla to have “unsupervised FSD” up and running in Texas and California next 12 months in the corporate’s Model 3 and Model Y electric vehicles. FSD, which stands for Full Self-Driving, is Tesla’s premium driver assistance system, available today in a “supervised” version for Tesla electric vehicles.
The technology still requires a human driver on the wheel, able to steer or brake at any time.
Closing at $217.80 on Friday, Tesla shares were off 12% year-to-date and 17% over the past 12 months.
‘Pre-event momentum fizzles’
Along with the Cybercab, Musk also announced plans to provide an autonomous, electric Robovan that may carry as much as 20 people, or be used to move goods. He said it’ll “solve for top density,” transporting a sports team, for instance.
After the event, analysts at Jeffries published a note titled “We, underwhelmed.”
Analysts at Barclays said the revelations failed to spotlight any near-term opportunities for Tesla, as an alternative prioritizing Musk’s vision for a totally autonomous driving future.
“As expected, like prior Tesla product unveils, the event was light on the main points, and as an alternative emphasized the vision underpinning Tesla’s growth endeavors in AI/AV [autonomous vehicles],” Barclays’ analysts wrote.
They added that the general public didn’t “get any near-term updates on FSD progress, or data reflecting improvement within the system.”
Piper Sandler analysts wrote in a report hat “most trading-oriented firms can be underwhelmed by the robo-taxi unveiling.”
“We would not be surprised if the stock sells off in the approaching weeks, as pre-event momentum fizzles,” the analysts wrote.
Analysts at Morgan Stanley, meanwhile, said that Musk did not make the case that Tesla is a man-made intelligence company through the event. The analysts noted that Musk didn’t offer any details on improvements to Tesla’s FSD system or say anything about rumored plans of a tie-up between Tesla and xAI, Musk’s AI company.
The event “overall dissatisfied expectations on a variety of areas: a scarcity of knowledge regarding rate-of-change on FSD/tech, ride-share economics and go-to-market strategy,” the Morgan Stanley analysts wrote.
“We were overall dissatisfied with the substance and detail of the presentation,” they added. “As such, we anticipate TSLA to be under pressure following the event.”
What’s clear after the event is that it’ll be years before Tesla has a fleet of self-driving cars on public roads and that regulators may have to weigh in on quite a few concerns over the protection features embedded into the vehicles.
Paull Miller, an analyst at Forrester, told CNBC in an email that a $30,000 Cybercab is not coming anytime soon.
“It’ll be extremely difficult for Tesla to supply a recent vehicle at that price inside that timescale,” Miller said. “Economies of scale might eventually allow the corporate to drive costs all the way down to something near $30,000. Without external subsidies, or Tesla making a loss on every vehicle, it doesn’t seem plausible to launch at anything near that price this decade.”
Alphabet’s Waymo, which has offered its robotaxi service to most of the people since June, is among the many few corporations which have successfully launched self-driving cars on public roads.