Tesla unveils its “Cybercab” on October 10, 2024 in Burbank, California.
Source: Tesla
Tesla Shares closed down nearly 9% on Friday after the electric car company's much-anticipated robotaxi event failed to impress investors.
CEO Elon Musk unveiled the company's self-driving Cybercab — a low, two-seat silver car, with no steering wheels or pedals — on Thursday evening, at the company's “We, Robot” event, and praised his company's ambitions to create a self-driving car. A fleet of autonomous vehicles and robots.
Musk said the company hopes to produce the Cybercab before 2027, but did not provide details about where the cars will be manufactured. He said consumers will be able to buy a Tesla Cybercab for less than $30,000.
He also said he expects Tesla to have “unsupervised FSD” up and running in Texas and California next year in the company's Model 3 and Model Y electric vehicles. FSD, which stands for Full Self-Driving, is Tesla's premium driver-assistance system, and is available today In a “moderated” version of Tesla electric cars.
The technology still requires a human driver behind the wheel, ready to steer or brake at any time.
Tesla shares closed at $217.80 on Friday, and are down 12% year to date and 17% over the past 12 months.
“Pre-event momentum fades.”
In addition to the Cybercab, Musk also announced plans to produce an autonomous electric Robovan that can carry up to 20 people, or be used to transport goods. He said it would “solve the problem of high density,” like moving a sports team, for example.
After the event, analysts at Jefferies published a note titled “We are disappointed.”
Analysts at Barclays said these revelations failed to highlight any near-term opportunities for Tesla, and instead prioritized Musk's vision for a fully self-driving future.
“As expected, like Tesla's previous product reveals, the event was light on details, instead emphasizing the vision underpinning Tesla's AI/AV growth endeavors,” Barclays analysts wrote.
They added that the public “has not received any near-term updates on the progress of the FSD, or data reflecting improvement in the system.”
“Most commerce-oriented companies will be discouraged by the unveiling of robo-taxis,” Piper Sandler analysts wrote in a report.
“We would not be surprised if the stock sells off in the coming weeks, as pre-event momentum fades,” the analysts wrote.
Meanwhile, analysts at Morgan Stanley said Musk failed to prove that Tesla is an artificial intelligence company during the event. Analysts noted that Musk did not provide any details about improvements to Tesla's FSD system or say anything about rumored plans for a tie-up between Tesla and xAI, Musk's artificial intelligence company.
The event “generally disappointed expectations in a number of areas: lack of data on the rate of change in FSD/technology, ride-sharing economics, and go-to-market strategy,” Morgan Stanley analysts wrote.
They added: “We were disappointed overall with the substance and details of the show.” “As such, we expect TSLA to come under pressure following the event.”
What's clear after the event is that it will take years before Tesla has a fleet of self-driving cars on public roads, and regulators will have to consider many concerns about the safety features built into the vehicles.
The $30,000 Cybercab isn't coming anytime soon, Forrester analyst Paul Miller told CNBC in an email.
“It will be very difficult for Tesla to introduce a new car at this price within this timeline,” Miller said. “Economies of scale may eventually allow the company to reduce costs to approximately $30,000. Without outside support, or for Tesla to make a loss on each vehicle, it does not seem reasonable to launch at anything close to that price this decade.”
alphabet Waymo, which has been offering its robotaxi service to the general public since June, is among the few companies to successfully launch self-driving cars on public roads.
