Topline
Tesla stock dove Friday as the initial reaction was sour to the electric vehicle company’s eagerly awaited robotaxi day, with analysts largely knocking the lack of details presented Thursday night by Elon Musk’s electric vehicle firm on its autonomous driving efforts.
Tesla CEO Elon Musk attends an event in France last year.
Key Facts
Shares of Tesla slid almost 8% to $220 by 10:30 a.m. EDT, losing about $60 billion in market capitalization – more than the equivalent of the total market value of each of its American auto rivals Ford ($43 billion) and General Motors ($54 billion).
The dive came hours after Tesla showed off its “Cybercab” self-driving taxis, its Optimus humanoid robots and its larger Robovan autonomous cab in a flashy Hollywood show, the most vivid picture yet of what Musk paints as the future of Tesla: Artificial intelligence and autonomous vehicles.
Wall Street largely found the robotaxi event lighter on material developments than hoped.
In separate notes to clients, Morgan Stanley analyst Adam Jonas shares he was “overall disappointed with the substance and detail of the presentation,” Bernstein analyst Toni Sacconaghi called the demonstration “underwhelming and stunningly absent on detail;” Barclays analyst Dan Levy noted “there were no updates indicating near-term opportunities,”Deutsche Bank analyst Edison Yu said he was “underwhelmed by the lack of details;” Laffer Tengler Investments CEO Nancy Tengler wrote it was “too general, too vague” for the market’s liking; and Wedbush analyst Dan Ives, a long-time Tesla bull, concurred “ideally Musk and Tesla should have spent more time on details.”
Sacconaghi, who is among the most pessimistic mainstream Tesla analysts with a $120 price target for the shares, noted among the missing details were an app for Tesla’s self-driving cab service, no major update on regulatory approvals and concerns Musk’s promise of Cybercabs by 2026 may prove to be “overly zealous.”
Chief Critics
There were plenty on Wall Street who found the robotaxi event encouraging despite the massive stock reaction. Ives wrote he “strongly disagree[s] with the notion that last night was a disappointment” and he left the event “more bullish on the Tesla story,” while Bank of America analyst John Murphy declared “the event lived up to the hype.”
Surprising Fact
Tesla stock was underwater Friday for its less-than-ideal progress on ride-hailing, but it was a strong day for the stock of existing ride-hailing dominator Uber. Shares of Uber spiked 9% to an all-time high, while shares of smaller competitor Lyft rallied 10%. The robotaxi demonstration provided “less concrete details & timelines than feared for Uber,” noted Bank of America analyst Justin Post.
Big Number
$10 billion. That’s how much poorer Tesla CEO Musk, the company’s largest individual shareholder, got Friday. Musk remains by far the richest man in the world with a net worth of $246 billion, according to Forbes’ calculations.
Key Background
Tesla remains the 10th-largest public American company by market value. Its share price moves much more variably than companies of similar sizes, with five days in 2024 of 9% or greater fluctuations, compared to one such daily move combined from shares of Eli Lilly, the U.S.’ ninth-biggest company, and Walmart, the 11th-largest. Shares of Tesla are down more than 10% year-to-date, moving against the tech-heavy Nasdaq stock index’s 22% return, with four consecutive quarters of profit declines weighing on Tesla stock.
Tangent
Former President Donald Trump railed against self-driving vehicles at a Thursday campaign event, saying he finds the technology a “little concerning” and he’s “going to stop” the self-driving cars “from operating on American roads.” The comment comes despite Musk and Trump’s recent alliance, as the Tesla chief appeared last Saturday at a rally for Trump, who he endorsed for president.
