Tesla Unveils Robotaxi Amid Mixed Reactions from Investors
After much anticipation, Tesla (NASDAQ: TSLA) launched its new robotaxi, the Cybercab, on Thursday night.
The Launch: A New Era for Autonomous Vehicles
Elon Musk, CEO of Tesla, showcased the Cybercab—which operates without a steering wheel or pedals—at the Warner Bros. soundstage in Burbank, California. This vehicle is designed for full autonomy, a step beyond the supervised self-driving feature found in current Tesla models. Musk stated that the Cybercab would retail for under $30,000, aiming to begin production in 2026. He also presented the Robovan, a larger autonomous vehicle capable of accommodating up to 20 passengers.
Wall Street’s Response: Mixed Feedback
Reactions from financial analysts varied. While Wedbush described the Cybercab as “very impressive,” Bank of America commented the event “lived up to the hype.” However, some analysts deemed the launch underwhelming. Investors echoed this sentiment, with Tesla’s stock dropping 8% in premarket trading on Friday. Many seemed to expect more detailed plans concerning production timelines and needed regulatory approvals, which must be secured state by state.
Ride-Sharing Giants Benefit from the Unveiling
Notably, ride-sharing leaders Uber Technologies and Lyft saw their stocks rise following Tesla’s announcement. Uber’s shares surged by 10%, indicating that investors felt the threat from Tesla’s Cybercab was not immediate. Currently, the competitive edge for ride-hailing companies comes from their extensive network of drivers, a factor likely to be impacted as autonomous technology evolves.
Image source: Getty Images.
Historical Context: The Realities of Autonomous Vehicles
Uber has previously tested autonomous vehicles but halted its Arizona program after a tragic incident in 2018 involving a human operator. Since that time, Uber has restructured its strategy, joining forces with companies like Alphabet‘s Waymo and GM‘s Cruise. This cooperation aims to mitigate potential threats while positioning Uber to benefit from the advancements in autonomous vehicle technology. Recently, Uber announced a partnership with Avride, an Austin-based AV start-up, reflecting its proactive approach.
Will Tesla Disrupt Uber?
The Cybercab event may have provided a temporary breath of relief for Uber; however, progress in autonomous vehicles continues to loom. Some Uber drivers are already utilizing Tesla’s Full Self-Driving (FSD) technology to manage longer work shifts. Although fully autonomous vehicles may still be years away, Uber’s long-term survival hinges on its ability to adapt to this impending transition.
Investment Considerations for Uber Technologies
If you’re thinking about investing in Uber Technologies, some factors merit your attention:
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Jeremy Bowman has positions in Bank of America. The Motley Fool has positions in and recommends Alphabet, Bank of America, Tesla, and Uber Technologies. The Motley Fool also recommends General Motors and has long positions on their stock options.
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