LOS ANGELES

Tesla's highly anticipated robotaxi unveiling event, held Thursday night on the Warner Bros. movie studio lot in Hollywood, left many investors and industry experts yearning for more concrete details amidst CEO Elon Musk's characteristically grand promises. The event, which showcased futuristic prototypes and ambitious timelines, failed to provide the specifics many hoped would outline Tesla's transition from an electric vehicle manufacturer to a leader in autonomous driving and artificial intelligence.

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The presentation, infused with electronic dance music and Musk's trademark showmanship, began with the CEO traversing the studio's faux streets in a sleek, silver two-door "Cybercab" prototype. Musk proceeded to make a series of bold announcements during his 20-minute address, including the promise that Tesla's popular Model 3 and Model Y vehicles would be capable of operating without driver supervision in California and Texas by next year.

Among the most striking declarations was Musk's commitment to start production of the fully autonomous Cybercab by 2026, with a price tag under USD 30,000. He also introduced a "robovan" concept, capable of transporting 20 passengers, which he claimed would revolutionise urban landscapes by "turning parking lots into parks." The event concluded with a display of Tesla's humanoid robots, which Musk asserted would eventually be sold for USD 20,000 to USD 30,000 each, boldly predicting, "I think this will be the biggest product ever, of any kind."

However, the market's response to these announcements was decidedly tepid. Tesla's stock closed nearly 9% lower at USD 217.80 on Friday, reflecting investor scepticism about the lack of practical details in Musk's presentation. While Tesla shares have surged over 30% since Musk's April announcement of the shift to robotaxis, they remain down nearly 16% over the past 12 months, significantly underperforming the S&P 500's nearly 33% gain during the same period.

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Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a Tesla shareholder, expressed disappointment in the event's focus. "His vision is lovely, but somebody has to actualize it," Gerber stated. "For now, for the next 24 months, Tesla has to sell EVs. Why aren't we focused on that?" Gerber and other investors had hoped to see plans for a more traditional, lower-priced mass-market vehicle that Tesla could bring to market in the near term, addressing the company's immediate challenges in the increasingly competitive EV landscape.

The absence of details regarding Tesla's robotaxi plans appeared to benefit ride-hailing companies Uber and Lyft, whose shares closed about 11% and 10% higher, respectively. Analysts suggested that the lack of specificity in Tesla's presentation eased competition concerns for these established players in the transportation sector.

Tesla's autonomous driving strategy diverges significantly from that of competitors like Alphabet's Waymo. Musk is pursuing a lower-cost technological path, which he believes will enable Tesla to scale up its autonomous vehicles more rapidly than rivals. However, this approach has critical weaknesses, primarily the difficulty in pinpointing the cause of crashes or failures due to the AI technology underpinning the self-driving system – a factor that could raise regulatory concerns.

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Matthew Wansley, a professor at New York's Cardozo School of Law, offered a sobering assessment of Tesla's position in the autonomous driving race: "Tesla software is at least years behind where Waymo is. That's the hard part. No flashy vehicle design is going to change that."

Ramesh Poola, co-chief investment officer at Creative Planning, which holds Tesla shares, expressed admiration for the presentation but noted the absence of crucial details. "Obviously, we were looking for more details on what exactly his future plans are going to be and how he's going to monetize this new AI and robotics," Poola said. He anticipates that regulators will pose a "major hurdle" to Musk's plans for unsupervised autonomous driving by next year, given that Tesla's current "Full Self-Driving" feature still requires constant human attention for safe operation.

Despite these concerns, some investors remain cautiously optimistic about Tesla's long-term prospects. Tasha Keeney, director of investment analysis at ARK Investment Management, a Tesla investor, said she was encouraged by Musk's timeline for offering an unsupervised version of the full self-driving system in Texas and California next year. "If they can do that, I don't see why they wouldn't launch a robotaxi service soon after," she commented.

As Tesla continues its ambitious push into autonomous driving and AI, the company faces the challenge of balancing Musk's visionary promises with the practical realities of the automotive market and regulatory landscape.