Tesla Shares Plunge After Cybercab Event; NHTSA Launches Investigation

[Financial News]  

Tesla shares plunged on the 4th.
Tesla held an event for its self-driving taxi, the Cybercab, the previous day, but its shares still plunged. The event failed to attract Wall Street investors’ attention, and the National Highway Traffic Safety Administration (NHTSA) immediately raised safety concerns. Hit by the double blow, Tesla shares fell 5.9%.

Tesla held an update event for the Cybercab the previous day in Austin, Texas, where its headquarters are located. The company began production of the vehicle in April, about two years after unveiling it. Attendance was by invitation only. There was no online livestream, and CEO Elon Musk did not attend.
Tesla unveiled a brown-plated vehicle with two seats and no steering wheel or brake pedal. Its doors open upward.
According to CNBC, Wall Street’s reaction was cool on the following day, the 4th.
In a research note released that day, analysts at RBC Capital Markets said Tesla had unveiled only limited improvements compared with its previous announcements. They noted that key questions about pricing, the production cycle and regulatory approval procedures remained unresolved.
RBC maintained its buy rating but expressed disappointment, saying, "The event marked a significant departure from Tesla’s long-standing tradition of making major product unveilings, and it was not made available to the public via livestream."
Wells Fargo & Company also issued sharp criticism in a research note titled "Tesla Cybercab Launch Event Falls Short of Expectations." It pointed to early operational and execution problems facing the Austin robotaxi service.
Users were also dissatisfied. They shared videos and complaints about route-generation errors, missing destinations, and excessive waiting and travel times involving Tesla’s robotaxis.

NHTSA has begun investigating whether the Cybercab meets federal motor vehicle safety standards.
The issue arose after Tesla unveiled a vehicle without a steering wheel or brake pedal at its event on the 3rd. U.S. transportation authorities require all vehicles to be equipped with such devices.
Amazon’s self-driving taxi Zoox also lacks these devices, but it received approval for an exemption from authorities through a separate process. Tesla is reportedly not known to have gone through the relevant procedure.
NHTSA is revising standards related to brake pedals, windshield wipers, lighting and rearview mirrors as part of its efforts to promote innovation. However, the agency emphasized that the existing standards will remain in effect until the revisions are completed.
[email protected] Kyung-jae Song Reporter