Investor concerns rise over Tesla CEO Musk's ‘underwhelming’ Cybercab event

Whatever Elon Musk may have been expecting as he unveiled his vision for driverless cabs on Thursday, it could hardly have been the ensuing fall of Tesla share value. The billionaire CEO took the wraps off the self-driving Tesla Cybercab at the “We, Robot" event on October 10 at the Warner Bro. Studios at Burbank, California. While Musk aimed to establish his idea for a driverless future, investor concerns grew over his ambitious goals that were lacking in technical detail.

The event, labelled underwhelming by many, led to a fall in Tesla shares by as much as 10 per cent on Friday on the New York Stock Exchange, as reported byBloomberg. This is said to be the biggest intraday decline for the company in more than two months, and has reportedly wiped out $58 billion in market value. This is in contrast to the fact that Tesla stock had risen by nearly 70 per cent since the middle of April, owing to expectations over the event.

Bloomberg further reported that the competing ride-hailing firms, Uber and Lyft, observed a rise in stock value by as much as 11 per cent on Friday, with Uber hitting an all-time high.

Lacking in detail

Tesla additionally revealed the Robovan, a large, driverless cab that has the capacity to carry up to 20 passengers. The company has not shared any details about its features and production timeline and it largely remains a concept.` (Tesla)

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Tesla additionally revealed the Robovan, a large, driverless cab that has the capacity to carry up to 20 passengers. The company has not shared any details about its features and production timeline and it largely remains a concept.` (Tesla)

Aside from showcasing the two-seater Cybercab, the event revealed a Robovan concept, which Musk said would have the capacity to carry up to 20 occupants. Musk has stated that the Cybercab will be priced under $30,000 (approximately ₹25.19 lakh), and that it will cost 20 cents a mile to operate over time.

The CEO added that the robotaxi will use inductive charging instead of a standard plug, which means it can charge “wirelessly" through electromagnetic induction. These were, however, the only specifics that were offered to investors and other attendees of the unveiling.

Musk has stated that the Cybercab will be available for purchase before 2027, but timelines remain as vague as ever. Musk made the first promises regarding robotaxis in 2016, claiming that self-driving cars would be available within a few years. In 2019, he stated that a fleet of nearly million of his self-driving cars would hit the streets by 2020. The deadline was subsequently moved back to 2024, and Musk's autonomous ambition is now set to go into production in 2026.

Regulatory hurdles

The Tesla Cybercab has no steering wheel or even a set of pedals and comes with a large, floating central display as the main console in the cabin. Investors remain concerned over regulatory hurdles and the safety levels of Full Self-Driving.

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The Tesla Cybercab has no steering wheel or even a set of pedals and comes with a large, floating central display as the main console in the cabin. Investors remain concerned over regulatory hurdles and the safety levels of Full Self-Driving.

Among the list of investor concerns are past issues with the FSD technology and regulatory difficulties that Tesla is likely to face in its endeavour to install driverless cabs. Although modern cars come with varying degrees of automation nowadays, these are not without complications, and humans are expected to remain alert behind the wheel and take over when necessary.

This is because the onboard computers that allow for self-driving operate within specific and predefined parameters. In the event of an unexpected circumstance that has not been accounted for before, these computers may direct the car to behave abnormally, requiring the driver to intervene.

In order to ensure these situations are handled as well as they can be, companies implement complicated and expensive tech, such as LiDAR which is implemented by Alphabet’s Waymo. LiDAR sensors all around the car use laser light to measure distance between objects and it has a wide range of applications outside of automobiles. Musk’s Tesla incorporates external cameras and ultrasonic sensors, and an onboard computer uses artificial intelligence to process the feed.

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While Tesla's FSD has had various levels of effectiveness, it is not without flaws, and the automaker has faced heavy scrutiny multiple times in the past for incidents that were allegedly avoidable. In 2021, the National Highway Traffic Safety Administration (NHTSA) of the US had opened a probe after having identified more than a dozen instances of Tesla cars on the Autopilot feature crashing into emergency vehicles that were stationary. The NHTSA had further identified more than 100 crashes that involved Tesla’s Autopilot.

The Washington Post reported that since 2021 when federal authorities started to require automakers to report crashes that involved driver assistance systems, more than 900 cases involved Tesla cars.

In one instance that was reportedly the first fatality from Full Self-Driving, a Tesla Model 3, struggling to navigate through mountain roads in Denver, Colorado, crashed into a tree and exploded. The Post reported that it was being driven by a Tesla employee who reportedly had to keep pulling it back on course.

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