Tesla stock drops 10% after Wall Street sees robotaxi event ‘stunningly absent on detail’

• Tesla stock fell as much as 10% after its robotaxi reveal underwhelmed Wall Street analysts.

• Analysts criticized Tesla’s lack of details for its robotaxi network, compared to Waymo’s already operational service.

• Tesla’s vision drew skepticism from Wall Street over execution and potential profit challenges.

Tesla stock dropped as much as 10% on Friday after the automaker’s robotaxi reveal event underwhelmed Wall Street.

Tesla CEO Elon Musk unveiled the company’s vision of the future, which includes two-seater Cybercabs ferrying people from point A to B autonomously. The car has no steering wheel or foot pedals.

But Wall Street wasn’t impressed, especially considering robotaxi service Waymo is already up and running.

“The Cybercab demos were conducted on a movie set in a well-controlled environment, and were very similar to a slow and short amusement park ride. Waymo is now hosting 100k rides per week in major cities, so we expect more from TSLA’s demo,” Wells Fargo analyst Colin Langan said.

A lack of details about the actual execution of Tesla’s vision seemed to be a common theme across analyst notes Friday morning.

Bernstein analyst Toni Sacconaghi said Tesla still has a lot to prove to investors, as the vision Musk offered Thursday evening wasn’t any different from the autonomous vision future he’s outlined in the past.

“We found Tesla’s Robotaxi event to be underwhelming and stunningly absent on detail,” Sacconaghi said.

He added: “Musk has painted a consistent vision and promise of autonomy for nearly a decade, and we (and investors) had hoped last night’s event would provide a detailed roadmap for getting there. But details were scant to non-existent.”

Even if Tesla manages to launch a robotaxi network by Musk’s timeline of 2026 or 2027, Sacconaghi said it probably won’t lead to outsized profits for the company because of technical and regulatory reasons.

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“Even if Tesla is able to be first to L5, it is likely that fast followers can catch up with competitive offerings, mitigating opportunities for outsized profits, and in the meanwhile, we continue to worry that Tesla’s core autos business will have limited growth and margin expansion until the lower cost Model 2 is ramped, likely only in 2027,” Sacconaghi warned.

There was at least one Wall Street analyst who struck a positive tone after Tesla’s robotaxi event: Wedbush analyst Dan Ives.

“We strongly disagree with the notion that last night was a disappointment as we would argue the opposite seeing Cybercab with our own eyes,” Ives said in a Friday note. “This vehicle is now a reality and not just talk.”

While shares of Tesla plunged on Friday, Uber stock popped 9% on the view that Tesla’s future robotaxi network is nowhere close to disrupting Uber’s core business.

Read the original article on Business Insider