Elon Musk's Robotaxi event promises a lot, why don't Tesla investors buy it?

According to the financial news app Zhitong Finance, Tesla (TSLA.US) CEO Elon Musk made a series of commitments at the highly anticipated Robotaxi event, but given Musk's history of breaking promises, investors are still cautious.

At the event, Musk promised that Tesla's popular Model 3 and Model Y vehicles will be capable of autonomous driving in California and Texas next year.

Musk stated that by 2026, the company will start producing the Cybercab robot taxi at a cost of less than $30,000 and showcased a robot truck capable of transporting 20 people within city limits. He mentioned that these products will "turn parking lots into parks" to reshape cities.

Musk also presented humanoid robots that can dance and mix drinks. He mentioned that Tesla will also sell these products, with an eventual price range of $20,000 to $30,000 per unit. He claimed, "I think this will be the greatest product ever."

However, some Tesla investors and experts expressed the need for more specific details to understand how the company plans to transition from a car manufacturer to a leader in autonomous driving and artificial intelligence.

Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, a long-term Tesla investor, stated, "His vision is great, but someone has to make it happen. For now, Tesla needs to sell electric cars in the next 24 months. Why not focus on that?"

Gerber expressed his excitement about products like the Cybercab and robot truck, but he also hopes the company will introduce a more traditional and affordable car in the near future.

For years, Musk has promised to sell a car starting at around $25,000, a commitment investors see as crucial to attracting new customers. Media reports on April 5th indicated that Tesla had abandoned this project, initially causing a drop in Tesla's stock price. Musk later responded that Tesla would launch a robot taxi on August 8th, which was later postponed to October.

"Years Behind"

Tesla's goal is to surpass existing autonomous vehicle manufacturers like Alphabet's Waymo through a low-cost technological approach. Musk believes this will allow Tesla to scale autonomous vehicles faster than its competitors.

Compared to its rivals, Tesla's strategy is simpler and much lower in cost, but it also has significant weaknesses. The main issue is that its AI-dependent autonomous driving system makes it nearly impossible to determine the cause of accidents or other malfunctions, which could raise concerns among regulatory agencies.

"Tesla's software is at least several years behind Waymo. This is the most challenging part. No matter how fancy the vehicle design is, it cannot change this reality," said Matthew Wansley, a professor at the New York Cardozo Law School.

Tesla's competitors also use similar AI and camera technologies, but for safety reasons, they install so-called redundant systems and more expensive sensors Monetization is Key

Ramesh Poola, Co-Chief Investment Officer at Creative Planning, who holds Tesla shares, stated that Musk's presentation left a deep impression on him, but "obviously, we want to know more details, such as what Musk's future plans are and how he will monetize this new artificial intelligence and robotics technology."

He expects regulatory agencies to pose "significant obstacles" to Musk's plan to shift to autonomous driving next year. Without continued human driver oversight, Tesla's current "full self-driving" assistive features cannot operate safely.

Poola said, "Musk showcased a prototype, which is indeed very exciting." However, he mentioned that the widespread adoption of autonomous Cybercabs "may still need three to four years."

Poola mentioned that this may not necessarily be a bad thing. He advised clients not to sell Tesla's stock, stating, "There are many ways to monetize this technology." He also said, "Cybercabs may not necessarily be launched next year, but in the long run, the feasibility is there."

Musk previously mentioned his plan to operate a fleet of self-driving Tesla taxis that passengers can summon through an app. However, he did not mention this app during Thursday's event.

Tasha Keeney, Investment Analyst at ARK Investment Management, who focuses on Tesla investments, expressed her desire to see more details about this app.

Nevertheless, Keeney noted that Musk plans to launch autonomous driving systems in Texas and California next year, which is encouraging to her.

She said, "If they can do this, I don't understand why they wouldn't launch the self-driving taxi service as soon as possible."

Before the U.S. stock market opened on Friday, Tesla fell nearly 6%. In recent years, Tesla's stock price has been hit due to concerns about cheap electric vehicle competitors eroding its market share. Since Musk announced the shift to robotaxis in April this year, the stock has risen by nearly 50%.

In contrast, ride-hailing companies Uber (UBER.US) rose 5% pre-market on Friday, and Lyft Inc (LYFT.US) rose 4%, indicating that Musk's statements are not seen as a threat to these two companies