Tesla’s stock tumbled 7.8 percent on Friday, weighing heavily on U.S. markets despite Wall Street’s approach toward new records.
The sharp decline came after the electric-vehicle maker’s “We, Robot” event on Thursday night, at which CEO Elon Musk unveiled the much-anticipated Cybercab, a fully self-driving prototype.
His presentation, however, left investors with more questions than answers.
The Cybercab, priced below $30,000 and featuring no steering wheel or pedals, was touted by Musk as a future growth driver, with a production target set for 2026 or 2027.
Investors quickly voiced skepticism, citing the vague timeline and a lack of details about regulatory approvals and production logistics.
Bernstein analyst Toni Sacconaghi described the event to Business Insider as “underwhelming and stunningly absent on detail.”
The disappointment was compounded by the absence of an update on Tesla‘s long-awaited affordable electric vehicle model, which the market had eagerly anticipated.
Instead, the event’s focus on futuristic technologies like the Cybercab and the Optimus humanoid robot—a bipedal machine showcased serving drinks—left some investors concerned about Tesla veering away from its core business of EV production toward speculative robotics and artificial intelligence ventures
Elon Musk at a Trump campaign rally in Butler, Pennsylvania, on October 5. Tesla’s stock dropped up to 10 percent following its “We, Robot” event, due to a lack of detailed plans for his self-driving Cybercab prototype.
Anna Moneymaker/Getty Images
Deepwater Asset Management’s Gene Munster posted to Musk’s platform, X, formerly known as Twitter, to note the vehicle’s release is “too far out for skeptical investors to get on board” confidently.
Despite these setbacks, broader U.S. markets saw gains, largely driven by robust earnings reports from major financial institutions.
Wells Fargo surged 5.4 percent after reporting stronger-than-expected profits, buoyed by venture capital investment gains and higher investment banking fees.
JPMorgan Chase rose 4.5 percent after delivering a milder-than-expected decline in profit, while BlackRock and Bank of New York Mellon also posted better-than-anticipated results.
These positive reports helped push the S&P 500 up 0.5 percent, with the Dow Jones Industrial Average climbing 264 points, or 0.6 percent.
The Nasdaq composite, however, lagged with a 0.1 percent increase, dragged down by Tesla’s volatility.
A Tesla store in Shanghai, China, as seen in February 2021. Tesla’s latest event showcased technologies other than the Cybercab, including the Robovan and Optimus robot.
Robert Way/Getty Images
Adding to the mixed economic landscape, automaker Stellantis saw its shares dip 4.6 percent in Europe following announcements of leadership changes, including the timing of CEO Carlos Tavares’ retirement.
Meanwhile, U.S. Treasury yields showed mixed movements after new inflation and consumer sentiment reports.
Producer prices rose 1.8 percent year-over-year in September, falling short of economists’ expectations. Weakening U.S. consumer sentiment suggested caution among traders ahead of the Federal Reserve’s November meeting.
Internationally, Shanghai’s stock index dropped 2.5 percent as investors awaited a briefing from China’s Finance Ministry, hoping for new stimulus measures.
The contrast between Tesla’s performance and the rally in financial stocks highlights a divide in investor sentiment.
While banks provided stability with concrete earnings and near-term growth, Tesla’s event suggests a greater sense of risk associated with their long-term technological bets.
Conversely, competitors such as Alphabet subsidiary Waymo and Mercedes have already made more significant strides in autonomous driving, with less regulatory furor.
This article includes reporting from The Associated Press.