Tesla unveiled its much-anticipated Cybercab Robotaxi at the "We, Robot" event, held at Warner Bros. Discovery studio in California.
CEO Elon Musk presented a prototype of the Cybercab, which features no steering wheels or pedals and is expected to cost less than $30,000 (€27,000).
Musk estimated the vehicle's average operating cost at just $0.20 (€0.18) per mile, and stated that consumers would be able to purchase one. The autonomous vehicle will rely on cameras and artificial intelligence for navigation.
In addition to the Cybercab, Tesla also revealed the Robovan, an autonomous vehicle capable of seating up to 20 people, and an upgraded version of its humanoid robot, "Optimus".
Musk commented: "With autonomy, you get your life back."
Back in April, Musk had suggested that Optimus could be deployed in Tesla's factories by the end of 2024.
Mass production of the Cybercab may commence in 2026, possibly earlier.
Musk stated that Tesla aims to begin unsupervised Full-Self Driving (FSD) in Texas and California next year, using the Model 3 and Model Y.
Previously, he had indicated that Tesla hoped to roll out FSD vehicles by early 2025, subject to regulatory approval, though he acknowledged that his timelines have often been too optimistic.
Robotaxi: Tesla's Future Growth Driver?
Tesla has been grappling with weakening global demand for pure electric vehicles, as well as increased competition from Chinese car manufacturers.
Its core business, car sales, has experienced year-on-year declines over the past two quarters. The Robotaxi launch is seen as a pivotal development for Tesla's future growth, marking a shift in focus from affordable car production to autonomous vehicles.
However, the new focus may not be enough to convince investors of Tesla's growth potential.
It remains uncertain whether Tesla will overcome its growth challenges before FSD vehicles contribute to the company's financial performance.
The company still faces significant regulatory hurdles and will need to earn customer trust.
Furthermore, Tesla's Robotaxi efforts lag behind competitors such as General Motors' Cruise and Alphabet-backed Waymo, both of which already have autonomous vehicles operating on public roads.
The event did not deliver any groundbreaking announcements beyond what was expected, which may not be sufficient to bolster Tesla's share prices.
Tesla Share Price Trajectory
Tesla's share performance has been underwhelming, down 4% year-to-date, compared to a 21% gain in the S&P 500.
It is the only tech company in the Magnificent Seven group to record negative performance.
Tesla's shares have fallen more than 7% since it reported disappointing third-quarter electric vehicle deliveries on 2 October.
The company delivered 462,890 vehicles, a 6.4% year-on-year increase, but missed the forecasted 470,000 deliveries, or an 8% annual rise.
This shortfall raises the risk of Tesla reporting its first-ever annual decline in car sales.
Despite a 70% rally from its year-low in April, driven by optimism towards its affordable cars first-quarter earnings results, Tesla shares may still be overvalued.
The company remains classified as a growth stock with a Price-to-Earnings (PE) ratio of 67, compared with Nvidia at 63 and Meta at 30.
Its earnings per share (EPS) for the June quarter were $0.42, reflecting a 46% year-on-year decline.
Tesla is scheduled to report its third-quarter earnings on 23 October, with analysts expecting a profit of $0.46 per share, representing a 13.2% annual decrease.
Given these figures, Tesla's market valuation may still be inflated based on recent performance.