Tesla Stock Crashes as Even Long-Time Bull Is Unimpressed With Robotaxi Event

Tesla held its robotaxi day which was rechristened “We, Robot” yesterday. While markets had big expectations from the event, the announcements fell short and TSLA shares are trading sharply lower today. Here are the key details from the event and why it left even some of the long-time bulls unimpressed.

At the event, Tesla unveiled its robotaxi or the Cybercab which happens to be the first product that the Elon Musk-run company has unveiled since Q4 2019 when it unveiled the Cybertruck pickup whose deliveries began in November last year after much delays.

Tesla Unveils Cybercab

The Cybercab is a low two-seater and has no steering wheels or pedals. The company also revealed that it would produce a bigger vehicle named Cybervan which would have the capacity to carry upto 20 people.

It also showcased the abilities of its Optimus humanoid. Musk said that the humanoid is doing some unspecified tasks in the Tesla factory and the company should be able to sell it externally by the end of 2025.

“Optimus will be more valuable than everything else combined because if you’ve got a sentient humanoid robot that is able to navigate reality and do tasks at request, there is no meaningful limit to the size of the economy,” said Musk at the event.

Adam Jonas Was Unimpressed

Morgan Stanley’s Adam Jonas who is among the most bullish sell-side analysts covering Tesla was unimpressed by the event. In his note titled, “That’s it? Disappointing Lack of Detail,” Jonas said, “We were overall disappointed with the substance and detail of the presentation. As such, we anticipate TSLA to be under pressure following the event.”

He is disappointed by Tesla not providing an update on its full self-driving (FSD) software – which is otherwise a misnomer as the system is still L4 autonomous and even Tesla advises drivers to keep their hands on steering all the time while using the FSD. Meanwhile, Musk said that next year, Tesla plans to run “unsupervised FSD” in Texas and California.

Jonas however sees the pricing for Cybercab – which Musk says would be below $30,000 as a positive and said that the company would have a cost advantage over Uber and Alphabet’s Waymo.

“The extent to which TLSA could offer a scaled autonomous offering faster than either player therefore represents a threat, but there was nothing last night to make that a larger threat,” said Jonas.

Barclays Says We, Robot Event Was ‘Light on Details’

Barclays, which is bearish on Tesla said, “As expected, like prior Tesla product unveils, the event was light on the details, and instead emphasized the vision underpinning Tesla’s growth endeavors in AI/AV [autonomous vehicles].”

The firm said, “Yet there were no updates indicating near-term opportunities. Tesla didn’t show its low-cost model planned for 1H′25 production.” Its note added, “We also didn’t get any near-term updates on FSD progress, or data reflecting improvement in the system.”

Gene Munster Says the Event Settles the Debate Over Tesla Being a Tech Company

Famed tech analyst and Deepwater Asset Managing Partner Gene Munster said that TSLA stock was falling after the event for two reasons. Firstly, he said, the Cybercab is still two years away which disappointed investors. Secondly, Munster said that the lack of updates on the affordable model that Musk has long been teasing disappointed investors.

Meanwhile, Munster was impressed with the Optimus humanoid which he said was more advanced than what he was expecting. He added, “As for pricing, Musk suggested that Optimus will be priced at $20k-$30k ‘long term.’ This type of phrasing, particularly in reference to timing, makes me believe it will be 2030 at the earliest before they hit that price point.”

Munster added, “Beneath the surface, the “We, Robot” event posed a challenge for traditional automakers as Tesla showcased an innovation edge that puts an end to the “Is Tesla a tech or car company?” debate.”

Some Doubt Tesla Would be Able to Offer Cybercab Below $30,000

Forrester principal analyst Paul Mill doubts Tesla would be able to sell Cybercab below $30,000. He said, “It will be extremely difficult for Tesla to offer a new vehicle at that price within that timescale.”

Mill added, “Economies of scale might eventually allow the company to drive costs down to something close to $30,000. Without external subsidies, or Tesla making a loss on every vehicle, it doesn’t seem plausible to launch at anything close to that price this decade.”

Notably, when Musk unveiled the Cybertruck in 2019, he said that the model would start below $40,000 but the model now starts at double that price. While the cost inflation over the years is certainly to blame, it was yet another example of Musk making bold promises that the company could not deliver on.

Musk has Been Touting Full Self Driving For Years

For nearly a decade now, Musk has been promising full self-driving almost every year. Last year, he said that he would be “disappointed” if the company did not hit the milestone by the end of this year – which it eventually did not.

While Tesla has missed several self-imposed deadlines for full autonomy, Musk is quite candid that it’s an aim that Tesla continues to strive for. “If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” said the billionaire during the Q1 2024 earnings call earlier this year.