Tesla (TSLA) stock took a hit during morning trading on Friday following the much-anticipated robotaxi reveal by Elon Musk, which failed to impress investors. The electric vehicle maker’s shares were down approximately 7.5% on Friday morning, after experiencing a 6% decline during pre-market trading. This decline comes after a 1% drop in shares on Thursday prior to the event.
Elon Musk unveiled Tesla’s Cybercab self-driving car prototype on Thursday evening. The robotaxi is expected to be the company’s first vehicle capable of autonomous driving, although Tesla currently offers driving assistance software for self-driving, the vehicles still require a human driver.
The Cybercab is projected to be available for purchase by consumers for less than $30,000. It has been reported that Tesla has either scrapped or postponed its plans for the Model 2, a planned $25,000 electric car, to focus on the robotaxi. Despite expectations from analysts for a preview of the Model 2 during the event, the vehicle was not mentioned by the company.
During the reveal, Musk stated that the Cybercab is likely to enter production “probably” in 2026 or “before 2027.” This timeline may not instill confidence in investors who have been skeptical of Musk’s history of delayed promises. The status of the Roadster, a concept that has been public since 2017 with production expected to commence in 2025, remains unclear.
The decline in Tesla’s shares can be attributed to the uncertain timing of the Cybercab, according to Gene Munster, managing partner at Deepwater Asset Management. Munster believes that the two-plus-year timeline for the Cybercab is too distant for incremental investors to place significant weight on the opportunity, urging existing investors to continue waiting for other company developments such as improving margins, higher delivery growth rates, and full self-driving capabilities.
Musk’s failure to mention the “more affordable” model that was previously anticipated to be available later this year or by mid-2025 also contributed to the stock slide, as per Munster. He speculates that the cheaper model is still in progress and predicts initial production to commence by late 2025. Highlighting a cheaper model now could potentially deter buyers from purchasing the current Model 3 and Y models.
In conclusion, Tesla’s stock decline following the robotaxi reveal highlights investor concerns regarding the timing of future projects, including the Cybercab and the more affordable model. Investors are eagerly awaiting tangible results such as improved margins, delivery growth, and advancements in full self-driving technology from the EV giant.
