In a surprising turn of events, Tesla shares fell approximately 6% during Friday’s premarket trading after CEO Elon Musk introduced the company’s new Robotaxi, leading to a staggering $40 billion loss in the electric vehicle maker’s market valuation. The announcement, which Musk touted as Tesla’s most significant launch since the Model 3 in 2017, did not resonate well with investors, according to reports from the Wall Street Journal.
The Robotaxi, described as a two-seat, fully autonomous vehicle devoid of steering wheels and pedals, was positioned by Musk as a pivotal innovation in Tesla’s future. However, the event left many investors underwhelmed. “Investors we spoke to at the event thought it was light on real numbers and timelines,” commented Tom Narayan, an analyst at the Royal Bank of Canada. He noted that prior Tesla events typically feature substantial data and clear projections, while this presentation seemed more focused on marketing and branding Tesla’s overarching vision.
During the unveiling, Musk painted an optimistic future where autonomous vehicles would eliminate the need for parking lots and alleviate rush-hour traffic congestion. However, the promise of this future came with a mere brief mention that the Robotaxi is expected to enter production in 2026 and will retail for less than $30,000. This lack of concrete details contributed to the stock’s decline, particularly after a pre-event rally that had briefly boosted Tesla’s market valuation to nearly three times that of Toyota, the world’s leading automaker.
Jessica Caldwell, head of insights at car-shopping site Edmunds, expressed skepticism about the ambitious timeline for achieving full autonomy. “Making the leap from where we are today to full autonomy, particularly through unsupervised vehicles with zero steering or pedals, is so gargantuan, technology-wise, that it feels overly ambitious in such a short period of time,” Caldwell remarked.
Additionally, Musk announced plans for an unsupervised version of Tesla’s full self-driving system, set to be released next year. Yet, analysts and investors remain cautious due to Tesla’s track record of missing deadlines associated with its ambitious claims. As the dust settles on the Robotaxi reveal, the market will be watching closely to see if Tesla can deliver on its promises or if investor confidence will continue to wane.
