Tesla Inc. rolled out the Cybercab for its robotaxi service almost two years after the driverless car was unveiled, advancing Elon Musk’s futuristic vision while drawing fresh scrutiny from US auto regulators.
The closed-door launch in Austin late Thursday was uncharacteristically low-key for Tesla, which didn’t offer a livestream or allow media in. The company opened a Cybercab-specific webpage earlier in the day and posted on social media that public rides would begin Friday evening.
The event was “light on details,” so the focus will shift to the extent to which the vehicles operate in regular service in the coming weeks, Evercore ISI analyst Chris McNally said in a note.
The start of passenger service has been shrouded in mystery and details of the rollout remain a key question for investors, who want to know if robotaxis represent a viable business and how quickly it can grow. The Cybercab, which has been in testing in multiple US cities in recent months, is seen as a key piece of Tesla’s plan to evolve beyond a maker of electric vehicles into a pioneer of artificial intelligence products.
Following the rollout, the US National Highway Traffic Safety Administration opened a probe into the “process and technical data on which Tesla relied” when the company self-certified the vehicles as compliant with federal safety standards. The audit query covers an estimated 1,000 of the vehicles, the agency said in a document posted on its website Friday.
Regulatory approval has been another of the lingering questions due to the vehicle’s lack of traditional driver controls. The two-seat vehicle doesn’t have a steering wheel, rear-view mirrors or foot pedals.
Details of the launch were posted by influencers who were invited. Some Tesla leaders spoke at the event, according to video posted by Tesla fan Sawyer Merritt on X, and attendees were able to take rides in the vehicle.
“Cybercab is here. It’s actually here,” Ashok Elluswamy, Tesla’s head of AI, said in a presentation. “You can go outside and take rides.”
Still, the event left Wall Street underwhelmed. Tesla shares fell 4.6% at 9:33 a.m. Friday in New York, the biggest intraday decline in six weeks.
“We find the lack of direct communication from Tesla as somewhat disappointing, with questions as to why the event was not streamed,” Barclays analyst Dan Levy said in a note. “And without any new incrementals on growth/scaling targets, we believe the event could prove to be less significant a catalyst than some investors had expected.”
Musk has pitched the Cybercab as the eventual backbone of a vast Tesla robotaxi fleet reaching most of the US, vowing to deploy thousands of the cars.
That grand vision has yet to materialize. Using versions of its Model Y SUV, Tesla began its long-awaited autonomous ride-hailing service last year in Austin and has since expanded to cities in Texas and Florida. In some instances, the rides include human safety monitors in the vehicle.
The company registered 45 Cybercabs with authorities in Texas just ahead of this week’s launch. That suggests Tesla is preparing for a larger-scale rollout, Andrew Percoco, a Morgan Stanley analyst, said ahead of the event.
With the Cybercabs, Tesla’s Texas fleet stood at 420 robotaxis as of Wednesday, mostly Model Y vehicles. That’s less than half of the nearly 1,000 vehicles that Alphabet Inc.’s Waymo, the leader in the robotaxi market, has registered in Texas.
Tesla investors are looking for a reason to get excited about Tesla’s prospects, with its core auto manufacturing business broadly stagnant. The company’s shares fell 16% this year through Thursday, while the S&P 500 Index was up 13%. The company’s shares have rallied somewhat in the weeks leading up to the event, rising 26% since July 29.
Regulatory Issues
The probe by auto safety regulators poses a potential complication to the rollout. While the vehicles used for testing and validation contain steering wheels, the Cybercabs that Tesla has put on the road for robotaxi use appear to lack those controls.
Federal rules typically require all vehicles to have several human-centric design features such as a brake pedal and side mirrors. Although US auto safety regulators have proposed changes to remove unnecessary barriers for autonomous cars, those plans have not been finalized.
Tesla also hasn’t followed the same path as Zoox, Amazon.com Inc.’s autonomous vehicle unit. The company in July secured an exemption from several federal safety standards to allow the commercial deployment of its own purpose-built robotaxi. The exemption was granted after Zoox faced issues attempting to self-certify its vehicle as compliant with federal motor vehicle standards.
NHTSA’s investigation indicates that Tesla has self-certified. As of Wednesday, the agency said Tesla had not filed an exemption request for the Cybercab.
Carlson writes for Bloomberg.
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