Investors are not convinced by Musk’s robotaxi promises

After touring the mock streets of the Warner Bros. film studio, housed in a sleek, silver two-door ‘Cybercab’ prototype, Musk promised that the company’s popular Model 3 and Model Y vehicles could operate without driver supervision driving in California and Texas through next year.

Musk said the company would start building the fully autonomous Cybercab by 2026 at a price of less than $30,000, and showed off a robovan that could transport 20 people around the city — which he said would reshape cities by “making parking lots into parks’.

Later came the dancing humanoid robots that also mixed drinks at the bar, which Musk said Tesla will also eventually sell for $20,000 to $30,000 each. “I think this will be the biggest product ever of any kind,” he stated.

Thursday night’s electronic dance music-infused event had the hallmarks of Musk’s salesmanship, but some Tesla investors and experts said they were hoping for more concrete details about how the company plans to transform from an automaker to an autonomous driving and artificial intelligence titan with a solid business plan.

Tesla shares fell nearly 10% in early trading Friday. The stock, which has been battered in recent years by fears that cheaper EV rivals would eat into Tesla’s market share, has risen nearly 50% since April, when Musk announced the move to robotaxis. Still, shares are down 8% over the past year, compared with a 33% rise in the broad-market S&P 500 index.

“His vision is great, but someone has to make it happen,” said Ross Gerber, Tesla shareholder and CEO of Gerber Kawasaki Wealth and Investment Management. “For now, Tesla needs to sell electric vehicles in the next 24 months. Why don’t we focus on that?”

Gerber said he was happy to see products like the Cybercab and the robovan, but also hoped to see a more traditional, cheaper, mass-market vehicle that the company could sell in the near future.

Musk had promised for years to sell a car expected to cost about $25,000, a promise that investors saw as crucial to winning new customers. Reuters exclusively reported on April 5 that Tesla had abandoned this project, initially sending Tesla shares lower.

Shares of ride-hailing companies Uber and Lyft rose about 5.8% and 6.9%, respectively, as analysts said the lack of details about Tesla’s robotaxis eased competitive concerns for the companies.