Tesla robotaxi event leaves investors wanting more

After Tesla's (TSLA) “We, Robot” robotaxi event on Thursday evening, investors apparently had more questions than answers.

CEO Elon Musk unveiled a fully autonomous Cybercab from the Warner Bros. Studios lot in Los Angeles, a vehicle with a design reminiscent of the electric vehicle maker's Cybertruck. The Cybercab is expected to be produced around 2026, with a promised price tag of $30,000. Musk also unveiled a fully autonomous robovan designed to transport cargo or up to 20 people.

The unveiling was more of a Hollywood entertainment event (with 1950s set design and Tesla-specific movie posters) than a product launch, and while Tesla fans enjoyed rides in the vehicles and drinks from Tesla's Optimus robot Investors and Wall Street analysts were less enthusiastic. Shares of the company fell over 7% on Friday.

“Overall, we found Tesla’s robotaxi event to be disappointing and surprisingly lacking in detail,” noted Tesla boss Toni Sacconaghi von Bernstein on Friday. “While Musk expressed his vision of an autonomous world, it offered little more than what he had expressed repeatedly in recent years.”

Sacconaghi complained that details about the new product offerings and time frames were missing. In particular, details were missing on the path to regulatory approval of robotaxis, FSD (Full Self-Driving) compatibility with Tesla's existing electric vehicle fleet, security measures and central monitoring of a robotaxi fleet.

Read more: Tesla stock falls as 'toothless' robotaxi disappoints

Sacconaghi believed Tesla would have a hard time overtaking other robotaxi competitors like Waymo and Cruise for regulatory and technical reasons. Additionally, the lack of any details or even a rendering of Tesla's upcoming sub-$30,000 electric vehicle, called the Model 2, was also a disappointment.

Bernstein and Sacconaghi maintained their Underperform rating and $120 price target following the event.

The lack of details also disappointed Tesla bulls like Morgan Stanley's Adam Jonas.

“Heading into what is arguably the most anticipated product launch in Tesla history, we had a number of expectations about what the market might experience that we believed were important to the direction and debate surrounding the stock,” Jonas wrote in a note to customers Friday morning. “Overall, we were disappointed with the content and details of the presentation.”

With the Cybercab in particular, there was no detailed discussion about technology aspects such as sensors, range, safety functions and configurations (e.g. seats), said Jonas.

In addition, Jonas, like Sacconaghi, pointed out that there is a lack of details on improvements to the FSD, a detailed rollout plan for consumer robotaxis, and financial analysis, among other things.

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Jonas maintained his Overweight rating and $310 price target, but fully expected the stock to come under pressure on Friday.

But not all analysts were disappointed. Bank of America's John Murphy was impressed with the event, claiming that it “lived up to the hype.”

Murphy was pleased with the details announced at the event, namely target dates such as the Cybercab production schedule in 2026 (which Murphy found “optimistic”), a potential starting price of $30,000, and unattended (i.e. no employee on site). Seated) FSD testing will take place next year in Texas and California.

Murphy was also impressed by the Optimus robot demonstrations after the main event and their significance to the entire Tesla story.

“Although the financial impact of these potential new products is unclear, AI and robotics could be an important development path for Tesla over the next decade,” Murphy said, adding that he was impressed by Musk's comment that the Cybercab had distributed computing power that would could be used for other tasks and that Tesla designed its own internal microchip, the A5, which would power both the Cybercab and the Optimus.

Nonetheless, with today's decline, Tesla shares are now down about 11% for the year, while the S&P 500 is up nearly 22%. Tesla will have its next chance to close the gap on the benchmark index when it reports earnings on October 23 after the market closes.

Pras Subramanian is a reporter for Yahoo Finance. You can keep following him Twitter and further Instagram.

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