Is this it? Wall Street is very disappointed with Musk and Tesla

Driverless taxis lack key details, humanoid robots rely on manual control, and the highly anticipated affordable car models are absent once again... Musk's so-called historic press conference ultimately disappointed Wall Street.

Tesla's overnight stock price plummeted, dropping more than 10% in early trading.

At the Robotaxi Day held on Friday, Tesla's driverless taxi (Robotaxi) prototype Cybercab and driverless bus Robovan made their official debut. According to Musk, Cybercab may be sold to taxi dispatch companies before "2027".

Musk also stated that he expects Tesla vehicles to achieve autonomous driving in Texas and California next year, and the humanoid robot Optimus will be priced at $20,000 to $30,000 for mass production, with Cybercab priced below $30,000.

"Is it that simple?" Morgan Stanley analyst Adam Jonas asked, questioning in his latest report:

We tested Cybercab and the latest robot Optimus on closed roads. In addition, we were hoping to get the latest information on Tesla's Full Self-Driving (FSD) system, such as performance improvements, Tesla's strategic plans for launching supervised and unsupervised ride-sharing services, including economic considerations and overall market analysis. We also hoped to hear about Tesla's collaboration with AI company xAI, or discussions on the "grand blueprint Chapter Four" of the company's future development plans.

However, none of these expectations were met, leaving Jonas disappointed with the information and details provided at the event.

No Surprises, Just Disappointments

Jonas also pointed out that Optimus performed some simple tasks such as pouring beer and dancing, but these models are not fully autonomous and require close human supervision and remote operation.

Our understanding is that these robots are not fully autonomous - they rely on remote operation (human intervention), so this is more like a demonstration of their freedom and flexibility.

Overall, we did not find anything new/novel from Optimus, clearly showing significant progress, including minor details unknown to the market before.

In addition to Morgan Stanley, analysts from UBS, JP Morgan, and other major banks have also expressed dissatisfaction with this conference.

UBS analyst Alejandro Nuno reviewed his experience riding in Cybercab, stating that the experience was decent but did not provide much useful information:

The car is small, but spacious for two people. However, the car only made a round on the stage. It's not complicated, so there's not much to interpret.

In fact, when our journey reached the designated stop, it couldn't find a parking space (none available), so instead of waiting for a spot, it continued to the next stop on the route.

Nuno believes that the Robotaxi launch event falls far short of meeting Wall Street's expectations.

Meanwhile, we believe that people have high expectations for Tesla to showcase the Model 2.5, but it was not displayed (as we expected). This is important because we think that compared to the new products showcased at the event, the new model is more likely to drive performance expectations for 2025/2026.

After attending the event, Morgan Stanley analyst Ryan Brinkman made a meaningful statement, suggesting that rather than expecting surprises from riding in a Cybercab to reach the destination, it's better to enjoy the ride itself. This speech implies that the autonomous driving function of the Cybercab may not have achieved the expected effect.

He pointed out that since April 22, despite Tesla's stock price rising by 68%, market expectations for the number of cars sold, EBIT (Earnings Before Interest and Taxes), and free cash flow for the full year 2024 have significantly declined. Forecasts for the coming years are also not optimistic, as the stock price increase seems to be more based on investors' expectations for Robotaxi Day rather than improvements in the company's fundamentals.

Brinkman believes that investors' expectations for Tesla may be too high, as evidenced by the way the event was announced:

1. The event was not announced through an official press release, Tesla's official tweets, or Musk's tweets, but rather mentioned by Musk in a reply on X platform. This informal and somewhat casual approach.
2. Musk's reply seems to be refuting a Reuters report claiming that an internal Tesla email indicated that the planned $25,000 "Model 2" project had been canceled or indefinitely postponed. Musk stated that the Model 2 project was not canceled but repositioned as a robotaxi and will be unveiled at Tesla's Robotaxi Day.
3. Musk's reply tweet successfully reversed the downward trend in Tesla's stock price on April 8 due to the Reuters report. However, investors may have placed too much emphasis on this tweet without realizing that it does not equate to a formal company statement.
4. Additionally, Tesla postponed the Robotaxi Day from August 8 to October 10, citing the need for design changes. This may indicate that the Tesla team is working to meet a challenging deadline, which may not be as easy to achieve as they expected.

Tom Narayan, a financial market analyst at RBC Capital Markets in New York, pointed out that investors believe this event lacks real financial numbers and timelines (especially with the highly anticipated affordable model absent once again), instead focusing more on branding and marketing Tesla's vision, which is truly disappointingDespite this, Narayan remains optimistic about Tesla's long-term development and believes that humanoid robots may become an important growth point for Tesla in the future.

Tesla's stock price falls, Uber "lying wins" soars to a new high

The market is not satisfied with Musk's Robotaxi answer, making the market more bullish on Uber and the ride-hailing company Lyft.

On Friday, Uber rose more than 10.5% to hit a historical high intraday, while Lyft rose more than 11.3% at one point.

Citigroup analyst Ronald Josey said:

"Tesla's activities make us clearer about the company's plans and schedule for autonomous taxis, which makes us more bullish on Uber's stock. There are few specific details about Cybercab sales and ride-hailing applications, which makes us believe that Tesla may still cooperate with Uber for sales."

Jefferies analyst John Colantuoni believes:

"This event is good news for Uber. He called Tesla's taxi 'non-competitive' and pointed out that the company has not provided any verifiable evidence of its progress in autonomous driving capabilities, nor has it indicated how many autonomous taxis it plans to produce."