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Elon Musk's robotaxi launch fails to wow Wall Street — and leaves Tesla analysts with more questions than answers

Oct 11, 2024, 18:42 IST
Business Insider
Tesla CEO Elon Musk's robotics showcase left analysts short on answers.PETER PARKS/AFP/Getty Images
  • Tesla's "We, Robot" event left analysts with more questions than answers.
  • Wall Street was broadly disappointed by the lack of detail, and skeptical of Elon Musk's timeframes.
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Elon Musk's "We, Robot" event on Thursday night failed to impress several Wall Street analysts. Investors also showed their disappointment by sending Tesla shares down as much as 7% in premarket trade.

The Tesla CEO showed off prototypes of its self-driving car, dubbed the robotaxi, and officially called the Cybercab, as well as its Optimus humanoid robots and a 20-passenger Robovan. But Musk failed to unveil the more affordable car he teased on July's earnings call as on track for a first-half release next year.

Here's how Tesla analysts and commentators reacted to the event.

  • Gene Munster, a managing partner at Deepwater Asset Management, posted on X that the absence of Tesla's cheaper model stood out. Musk may have withheld it to avoid people canceling or delaying vehicle orders and waiting for its release instead, Munster said.
  • Dan O'Dowd, the CEO of Green Hills Software and a vocal skeptic of Tesla's autonomous-driving efforts, said the closely controlled demonstration of the Cybercab looked more like a "1950s Disneyland ride" than the future of transportation.

    "Elon Musk is trying to compete in the Tour de France on a tricycle," he said in an emailed note, arguing that rival Waymo is miles ahead in rolling out the tech.

  • Paul Miller, a principal analyst at research firm Forrester, said it would be "extremely difficult" for Tesla to realize Musk's vision of selling a Cybercab for under $30,000 by 2026 or 2027.

    "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," Miller said in a note that emphasized the regulatory hurdles ahead.

    Elon Musk has unveiled Tesla's robotaxi.Tesla
  • In a research note, Jefferies analysts covering Uber called out Tesla's lack of verifiable proof of progress toward autonomous driving. They also underlined the challenges of scaling a robotaxi business, from the tech required to the regulation involved and the complexity of routing and fleet management.
  • Garrett Nelson, a senior equity analyst at CFRA Research, said in a research note the Tesla event "raised a lot of questions," and he was "disappointed by the lack of detail" about the company's short-term product road map.
  • Wedbush analyst Dan Ives, a longtime Tesla bull, said in a research note the Cybercab's design was "very impressive," and Optimus was closer to becoming reality than he expected. He also hailed the prospect of a robotaxi fleet as transformative for Tesla, saying it "could be a $10 billion annual business at scale."
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