Tech

Tesla Shares Dip 6% on Robotaxi Unveil Delay, Missed Deadlines

Tesla shares drop 6% after robotaxi unveiling delayed by two months to October.

By Jack Wilson

7/11, 13:38 EDT
Tesla, Inc.
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Key Takeaway

  • Tesla shares fell 6% after delaying the Robotaxi unveiling from August to October, ending an 11-day rally.
  • The delay adds to a history of missed deadlines for Tesla's autonomous vehicle promises, while competitors like Waymo and Cruise advance.
  • Despite the setback, some analysts remain optimistic about Tesla's long-term prospects in autonomous and AI-driven technology.

Tesla Delays Robotaxi Launch

Tesla shares fell approximately 6% on Thursday following a Bloomberg report that the electric vehicle maker is delaying the unveiling of its Robotaxi by two months. Initially scheduled for August 8, the launch has been pushed back to October to allow more time for prototype development, according to sources familiar with the decision. Tesla did not immediately respond to CNBC’s request for comment. The delay was communicated internally, with the design team instructed to rework certain elements of the car.

The stock decline on Thursday ended an 11-day rally that had been driven by a better-than-expected deliveries report for the second quarter. This rally had erased the stock’s losses for the year, but the shares are now back in negative territory for 2024. The year has been challenging for Tesla, marked by sweeping layoffs and a drop in sales, partly due to an aging lineup of electric vehicles and increased competition in China.

Historical Promises and Delays

Tesla CEO Elon Musk has been promising shareholders a robotaxi for years. In 2015, he claimed that Tesla’s cars would achieve “full autonomy” within three years. In 2016, Musk said Tesla would be able to send one of its cars on a cross-country drive without human intervention by the end of the following year. These promises continued into 2019, when Musk stated on a call with institutional investors that Tesla would have 1 million robotaxi-ready vehicles on the road by 2020. However, the company has yet to deliver a robotaxi, autonomous vehicle, or technology that can turn its cars into “level 3” automated vehicles.

Meanwhile, competitors like Alphabet’s Waymo and General Motors' Cruise have made significant advancements in autonomous vehicle technology. Following a lackluster first-quarter earnings report in April, Musk reiterated his vision of Tesla as a company dedicated to developing robotaxis that will generate revenue for their owners and form a driverless transportation network. “If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company,” Musk said during the earnings call.

Market Reaction and Analyst Views

The delay in the robotaxi unveiling has had a noticeable impact on Tesla’s stock. The shares fell as much as 8.3% in intraday trading on Thursday after Bloomberg News first reported the delay. The optimism surrounding the initial August 8 date had contributed to an 11-day streak of gains, adding more than $257 billion to Tesla’s market capitalization.

Despite the negative market reaction, some analysts remain optimistic. “While the knee-jerk reaction will clearly be negative on a delay of Aug. 8 based on this report that just hit, we believe the timing of robotaxis, partnerships, and the ultimate autonomous and AI-driven technology does not change at all for our bullish Tesla thesis,” said Dan Ives, an analyst at Wedbush Securities.

Management Quotes

  • Elon Musk, CEO of Tesla:

    "If somebody doesn’t believe Tesla’s going to solve autonomy, I think they should not be an investor in the company."