Uber Technologies and Lyft climbed in early trading after Tesla’s Elon Musk offered few details on the car maker’s plans for a self-driving vehicle service that could compete with ride hailing.
Uber’s stock jumped after Musk’s unveiling of a robo-taxi called Cybercab late on Thursday in California. Tesla shares traded down as much as 6.9%.
Musk’s debut of the two-seat prototype and a Robovan concept that can transport as many as 20 people let down Tesla investors who were hoping for more specifics. While he said Cybercab production may start in 2026 and cost less than $30 000, the CEO cautioned that he tends to be overly optimistic.
“We consider the event a best-case outcome for Uber,” said John Colantuoni, an equity analyst at Jefferies with a buy rating on the stock. In a report referring to Tesla’s taxi as “toothless”, he noted the company didn’t provide verifiable evidence of progress towards automated driving features or quantify how many robo-taxis it plans to make.
Thursday had been viewed as a “make or break night” for Tesla shares, according to Mike O’Rourke, chief market strategist at JonesTrading. The event had already been delayed by two months, and Tesla was under pressure to justify its high valuation and prove it can lead the industry in autonomous vehicle technology.
Sober take
Uber CEO Dara Khosrowshahi offered a sober take on the future of autonomy earlier this week, saying he doesn’t see robo-taxis becoming a significant portion of the company’s fleet for years. The technology is still not quite there, regulators are wary and costs won’t be competitive for a while, he told Bloomberg Green’s Zero podcast.
“Safety is job number one,” Khosrowshahi said. “We will then, I would say in the next three to seven years, start to focus on economics.” — (c) 2024 Bloomberg LP
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