- Investors, analysts and the general public seem deeply unimpressed with Tesla's robotaxi event earlier this week.
- Tesla's stock closed down 8% on Friday, when it was supposed to be a propulsive event for the company.
- CEO Elon Musk has vowed to make Tesla into an AI and robotics powerhouse, but proof of this plan feels in short supply.
Now that the dust has settled from Tesla's big autonomous driving and robotics event on Thursday evening, the wider reaction to it can probably be summed up in two words: "That's it?"
The We, Robot event saw the unveiling of the Tesla Cybercab, the surprise debut of the Tesla Robovan and more details about CEO Elon Musk's vision of an "age of abundance" brought about by artificial intelligence and automation. It was meant to be a "make or break" moment for Tesla and its stock price as it seeks to convince investors and the wider public that it has what it takes to go from being an electric car company to a bonafide AI powerhouse.
However, the roughly 20-minute event—which saw Musk narrate a video presentation before offering a crowd of supporters brief test rides in a highly controlled Hollywood backlot—was big on vision but extremely light on technical details. And Wall Street has not responded very kindly to what Planet Earth watched on Thursday.
"Did the ‘We, Robot’ event meaningfully advance the narrative of Tesla as an AI company?" reads one particularly scathing report co-authored by Morgan Stanley's Adam Jonas, normally a reliable Tesla bull. "We were overall disappointed with the substance and detail of the presentation. As such, we anticipate $TSLA to be under pressure following the event." The authors weren't wrong; Tesla's stock price closed 8% down on Friday evening.
Morgan Stanley's analysts had the same questions about Tesla's approach to autonomy and AI that journalists and the wider public did: details on improvements to the Full Self-Driving software suite, more information on how Tesla plans to take an actual on-demand taxi service to market, and how this AI-driven approach to training cars to operate autonomously might actually work. None of those things came up in any meaningful sense during the presentation.
That starts with the Cybercab itself. "Other than the mention of inductive charging, there was no detailed discussion about the capabilities of Cybercab including technology (Inference hardware? Sensor suite? Lidar? L4/L5?), range, safety, utility, flexibility/configurations, etc.," the report said. "Many have remarked that it looks like the ‘Model 2’ prototype repackaged as an autonomous vehicle."
Indeed, widespread wireless charging from the automaker that built what is objectively the industry-standard EV infrastructure alone would be a huge deal. But Musk offered no details about how that might work, what the charging speeds and times could be, or how it could be implemented across the wider lineup.
Morgan Stanley's analysts did give credit to Tesla for announcing that "fully autonomous unsupervised FSD" is planned for the Model 3 and Model Y would start in Texas and California next year. "If approved, California will be of particular note given its comprehensive data-reporting standards, which we should be able to compare to Waymo," the report said. However, "Again, there was no demonstration of or updates to the latest advancements of FSD technology, no mention of any go-to-market strategy in a ridesharing service or supporting economic inputs for investors to dig into."
The report indicated that it wasn't even clear whether the Robovan or Cybercab were operating fully autonomously on their closed course. It was even less generous to the Optimus robots serving drinks and mingling with the crowd: "It is our understanding that these robots were not operating entirely autonomously, but relied on tele-ops (human intervention) so it was more a demonstration of degrees of freedom and agility," the report said.
Morgan Stanley's analysts were hardly alone in their assessment. Former Waymo CEO John Krafcik said the Cybercab's design looked "more playful than serious," and questioned how it might be usable for people with disabilities. The Google-owned company has had driverless taxis on the road for years now and is quickly expanding into other cities. Simply put, a Waymo taxi in San Francisco will do more right now than any Cybercab seemed capable of at Thursday's event.
CNBC reports that Jeffries, Barclays, Piper Sandler and other firms were similarly underwhelmed, with analysts at the latter saying, “most trading-oriented firms will be underwhelmed by the robo-taxi unveiling.”
But that opinion wasn't completely unanimous. Dan Ives, a Wedbush analyst and longtime Tesla supporter, was more optimistic. "We believe last night was a glimpse of the future of Tesla and next-generation transportation for consumers," Ives wrote. "We strongly disagree with the notion that last night was a disappointment, as we would argue the opposite seeing Cybercab with our own eyes and the massive improvements in Optimus which we interacted with throughout the evening."
As always, stock price isn't everything when it comes to defining the electrified, connected and increasingly automated future of transportation. But in this case, it kind of was.
Tesla's stock price powers nearly everything in Musk's world, including his own higher ambitions to one day leave it. And Tesla has been widely reported to be less focused on new, affordable electric models than it is on AI and robotics, so if this event was meant to set the company on that course, it likely fell short. It also needed the boost because while it remains the U.S. leader in EV sales, its market share is falling quickly to rivals who have newer electric models in the pipeline while Tesla may or may not.
The brevity and lack of detail at the event may also raise more questions about Musk's focus on Tesla, a bone of contention with many investors, owners and fans for more than a year now. Besides his numerous other ventures including SpaceX, xAI, the social media platform formerly known as Twitter and, according to the New York Times, relocating to Pennsylvania to direct large parts of former President Donald Trump's reelection effort, it feels less clear than ever how focused the CEO is on his only publicly traded company.
At any rate, if this is really the direction Musk intends to take Tesla in, he has as much to prove now as he did on Thursday morning.
Contact the author: patrick.george@insideevs.com
