Last Friday, Tesla (TSLA) had the worst day in markets in over a year. The stock lost 8.78% despite the struggling electric vehicle giant unveiling the Cybercab, Optimus robot, and the Robovan. Why did shareholders dump TSLA stock after the triple product announcement?
At the product announcement last Thursday night at Warner Bros Studio, Tesla introduced a two-seat Cybercab prototype. CEO Elon Musk said that the taxi would have improved safety and a lower operating cost, measured on a per-mile basis. Unfortunately, Uber (UBER) and Lyft (LYFT) stock soared last week after Tesla stock slumped.
Investors are skeptical that the Cybercab will cost less than $30,000. The firm will begin production in 2026. Previously, Tesla promised an affordable Cybertruck, only to charge nearly $97,000 when it launched. Furthermore, the firm may not meet the delivery date in two years.
The event disappointed the media. The firm did not give the audience any substantive details on the technology. Until the company releases full self-driving in its core products, Tesla risks not delivering on a self-driving taxi cab.
Core Business
Markets will re-focus their concerns on Tesla’s core bread and butter of selling EVs. As China floods the market with cheap EVs costing only around $11,000, Tesla will lose market share. Problems will worsen as EV prices fall and profit margins shrink.
TSLA stock has selling pressure ahead. Be wary of holding this stock for the long term.