Tesla Shares Drop Following Unveiling of Cybercab Robotaxi

Tesla’s long-anticipated Cybercab, a fully autonomous robotaxi, was officially unveiled by CEO Elon Musk at Warner Bros Studios in Burbank, California. The futuristic vehicle, which lacks pedals and a steering wheel, made its debut at an event titled “We, Robot,” where Musk highlighted the company’s vision for the future of self-driving technology.

The Cybercab, with its two wing-like doors, was presented as a key project for Tesla’s next chapter. Musk reiterated his belief that self-driving vehicles will prove to be safer than human-driven cars and suggested that Tesla owners could potentially earn money by renting out their cars as robotaxis.

However, despite the fanfare, Tesla’s stock took a hit following the announcement. By mid-morning Friday, the company’s share price had fallen over 8%, trading at approximately $219. Meanwhile, shares of ride-hailing competitors Uber and Lyft, who also have autonomous vehicle ambitions, saw their stocks climb by as much as 10%.

Musk acknowledged that production of the Cybercab is not expected to start until “before 2027,” sparking scepticism given his history of missing deadlines. “I tend to be optimistic with time frames,” he quipped during the event.

The Cybercab is slated to cost under $30,000, according to Musk. However, industry analysts have expressed doubts about this target. Paul Miller of Forrester Research commented, “Without external subsidies or Tesla absorbing losses, it seems unrealistic to launch a vehicle at that price within this decade.”

Safety concerns have also been raised about Tesla’s autonomous driving plans. Tesla’s approach relies on cameras rather than the radar and Lidar systems used by many competitors. According to Samitha Samaranayake, an engineering professor at Cornell University, this raises safety questions. “It’s a big chunk of metal driving at high speeds—safety concerns are significant,” Samaranayake said.

Tesla has faced delays with the Cybercab, initially slated for release in August. Competing robotaxis from companies like Waymo and Cruise are already operating in the U.S., putting pressure on Tesla as it navigates a challenging electric vehicle market and slowing sales growth.

Despite these challenges, Musk’s presentation was a spectacle, featuring dancing humanoid robots and another prototype, the “Robovan,” designed to transport up to 20 passengers. Analysts like Dan Ives of Wedbush Securities saw potential in Tesla’s new direction, with Ives remarking that the Robovan could become a new mode of transportation for the company.

While Musk painted an ambitious picture of the future of transportation, doubts remain about whether Tesla can meet its bold promises. As Jessica Caldwell, head of insights at Edmunds, noted, “Many questions remain about how this will be achieved from a practical standpoint.”

The robotaxi market continues to evolve, with companies like Waymo, Uber, and Baidu expanding their autonomous vehicle efforts, even as the sector faces challenges such as regulatory setbacks and safety concerns.