Tesla Shares Drop 9% Following Underwhelming Robotaxi Unveiling

 

Tesla's stock took a significant hit on Friday, plummeting nearly 9%, resulting in a loss of around $60 billion (£45 billion) in market value. The sharp decline came after the much-anticipated reveal of the company's robotaxi failed to meet investor expectations. By the close of the market, shares of the electric vehicle giant had dropped to $217, marking a year-to-date decline of roughly 12%.

Elon Musk, Tesla's CEO, introduced the "Cybercab," a fully autonomous vehicle expected to be in production by 2026 at a price under $30,000. Musk showcased a van capable of transporting 20 passengers autonomously, claiming it could revolutionize urban areas by eliminating the need for traditional parking spaces. He also predicted that all transport would be fully autonomous within the next 50 years, suggesting that car parks in cities could be converted into green spaces.

Despite the bold vision, the event left many investors unimpressed. Analysts criticized the lack of detailed information, particularly around production timelines and other Tesla projects. Tesla has a history of grand announcements that often fall short of the aggressive timelines Musk sets, which may have contributed to investor skepticism.

Tom Narayan, an analyst from the Royal Bank of Canada, noted that the event lacked concrete numbers and timelines, leading to uncertainty. He commented that investors anticipated more specifics, especially regarding a lower-priced vehicle, but instead, the focus was on branding and the company’s vision.

Similarly, Garrett Nelson from CFRA voiced his disappointment, stating that the presentation felt more like a controlled demonstration than a comprehensive product reveal. He expressed concerns about the lack of details concerning Tesla’s near-term product plans, such as the more affordable models and the long-awaited Roadster, both of which are now expected in 2025.

On the positive side, Tesla's long-term vision for autonomous transport, particularly with the Cybercab, holds the potential to reshape urban landscapes and transportation systems. If successful, this could pave the way for significant innovation in city infrastructure and mobility. The affordability of the Cybercab, combined with its advanced autonomous capabilities, could make it accessible to a broader audience, driving further market penetration.

However, the drawbacks are clear. The lack of specific details on production timelines and the absence of other anticipated announcements left investors cautious. Additionally, Musk's history of ambitious but delayed projects, coupled with vague future projections, has heightened concerns about whether these promises will be realized within the stated timeframe.

As a result, Tesla’s stock continues to reflect this uncertainty, with many investors adopting a wait-and-see approach. While Tesla’s vision for the future of autonomous transport is ambitious, it will need to provide more clarity and follow through on its promises to regain investor confidence.