Where Tesla's Robotaxi Rollout Stands Today and What Investors Should Know
Key Points
Tesla held a Cybercab event at the beginning of the month and launched official ride services in Austin, Texas.
The company shared some encouraging new info about the Cybercab project, but investors may have been expecting more.
The Cybercab event also put regulatory concerns back into focus.
The robotaxi market is central to Tesla's (NASDAQ: TSLA) growth story. Valued at more than 200 times this year's expected earnings, there's some very strong expansion priced into the stock even after some recent pullbacks. Meanwhile, the electric vehicle (EV) business, the company's core sales generator, appears to be plateauing, and its Optimus humanoid robots, positioned as another key growth driver, could be years away from generating meaningful revenue. That sets up a dynamic in which Tesla's Cybercab robotaxi is very important to the near-term outlook for the business and its stock.
On Sept. 3, the company announced the official launch of services for its Cybercab in Austin and held an event to showcase its robotaxi project. Here's what investors need to know about the evolution of the Cybercab project and what it could mean for Tesla stock.
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What the Cybercab picture looks like today
While the Cybercab event earlier this month had been heavily hyped by some investors and analysts, the actual showcase proved to be a relatively no-frills affair. Tesla CEO Elon Musk actually wasn't even present for the showcase, and the company's stock saw a meaningful pullback following the event. Here's a look at the key points that Tesla highlighted in its Cybercab event.
- Cybcercab had its official launch on public roads in Austin, Texas, in conjunction with the event. Tesla also spotlighted the official final design for the first generation of Cybercabs, with the gold-colored, two-seat, two-door vehicles officially featuring no steering wheel or pedals.
- Tesla highlighted some promising manufacturing details at the event. The company said that it had significantly improved efficiency for its Cybercab manufacturing, with officials touting a 50% reduction in the production line size, along with improved production output
- The company said that the vehicles require no rare-earth minerals. The U.S. currently relies on China for the vast majority of its rare-earth mineral sourcing, but continued access to these resources has been called into question by trade war dynamics and the increasingly adversarial relationship between the two countries.
While the official launch of the Cybercab in Austin can be taken as a positive in pure terms, its rollout was also accompanied by news that the U.S. National Highway Traffic Safety Administration (NHTSA) was conducting safety and regulatory compliance reviews on the vehicles.
Along with ongoing questions about whether Cybercab's autonomous navigation tech will function at high levels in various driving scenarios, uncertain progress in regulatory dynamics raises questions about the outlook for Tesla's autonomous vehicle business. These conditions may also at least partially explain why the recent Cybercab event looked like a partially scaled-down affair.
Cybercab and other autonomous vehicle technologies could wind up being a huge performance driver for Tesla over the long term, but the recent event may suggest that the company's robotaxi business is still not quite ready for primetime.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.