Tesla CEO Elon Musk is given to making bold promises about disruptive technology. However, the unveiling of the Tesla Robotaxi Cybercab at the “We Robot” event left disappointed investors.
Tesla unveiled its self-driving Cybercab and Cybervan on October 10, 2024, in a move to establish the company’s position as a leader in the autonomous vehicle industry. However, it didn’t meet investors’ expectations, resulting in a 9% dip in Tesla’s stock value and a market loss of approximately $58 billion.
The Cybercab’s ambitious price tag
The Cybercab is expected to be priced around $30,000; according to Musk, “I think the cost of autonomous transport will be so low that you can think of it like individualized mass transit.”
However, this price might be a bit optimistic. Paul Miller, VP and Principal Analyst at Forrester, expressed concern about that launch price, saying Tesla could incur significant losses without external subsidies.
The event was also expected to demonstrate Tesla’s progress in the development of Full Self-Driving (FSD) technology. However, we saw more futuristic designs of the vehicles (Cybercab and Cybervan) than advances in autonomous technology.
The event delivered on the awe factor as the conspicuous absence of steering wheels and standard controls in the Cybercab and Cybervan made them look like props from a Sci-Fi movie. However, there were no consequential updates about the FSD software.
Investment analysts were underwhelmed, saying there’s no verifiable evidence of significant advancement in FSD technology.
Navigating regulation amidst competition and investors’ concerns
Tesla’s competitors have made significant progress in the autonomous taxi market. Waymo has launched its Robotaxi services, and General Motors’ Cruise is currently testing its FSD capabilities in urban areas. Meanwhile, the Cybercab isn’t expected to be in production until 2027.
Musk also noted that regulators must first greenlight the service.
These concerns raise questions about Tesla’s capacity to remain competitive in the robotaxi market, given that its competitors have been able to launch with fewer technological and regulatory obstacles, potentially putting them ahead of Tesla.
Investors also express concerns as Tesla moves from a manufacturer of high-performance EVs to AI and robotics. These detours could potentially negatively impact the brand’s identity and the company’s baseline in the face of fierce competition.
Tesla faces both challenges and opportunities with the planned launch of the Cybercab. Despite the appeal of self-driving taxis, the company must address regulatory and technological issues to keep up with market competition.
The company also faces the thankless task of juggling its goals with the demands of shareholders who prioritize outcomes in the electric vehicle industry.
The unfolding narrative will reveal whether Musk’s vision can transform into a product that attracts market attention and reassures investors’ trust because the competition will only intensify in the autonomous automotive industry.