During a highly publicized event near Los Angeles on Thursday, CEO Elon Musk unveiled the prototype of the Tesla robotaxi, named Cybercab. He announced that production is set to begin in 2026, with a projected price tag of under $30,000.
However, in typical Musk fashion, he overlooked discussing how a two-seater robotaxi would cater to families traveling to restaurants or airports, raising questions about its appeal to a broader market.
The design and lack of financial specifics drew criticism from investors, resulting in a 9% drop in Tesla's stock on Wall Street the following day.
"When you think of a cab, you envision a vehicle that can transport more than two individuals," remarked Jonathan Elfalan, vehicle testing director at Edmunds.com. "The decision to limit this to a two-seat configuration is quite puzzling."
Tesla did not provide a response to a request for comment.
Industry experts suggest that robotaxis should resemble traditional taxis, featuring ample space, a taller profile, and sliding doors. Musk did present a futuristic robovan capable of seating up to 20 passengers but did not specify its availability timeline.
The market for two-door robotaxis is expected to be quite restricted, according to Sandeep Rao, a senior researcher at Leverage Shares, an investment management firm with approximately $1 billion in assets, including Tesla.
Data from analytics firm J.D. Power indicates that two-door vehicles represent only 2% of car sales in the U.S., excluding SUVs and pickups.
Musk expressed his ambition to make robotaxis more affordable to operate than mass transit, estimating an operational cost of 20 cents per mile for the Cybercab over time.
However, he did not clarify how quickly Tesla could achieve mass production of Cybercabs or obtain the necessary regulatory approvals, nor how it plans to compete with Alphabet's Waymo, which already operates robotaxis in several U.S. cities.
Waymo operates a fleet of approximately 700 Jaguar Land Rover vehicles, each accommodating four passengers, which aligns with the seating capacity of Amazon's Zoox robotaxis.
Former Waymo CEO John Krafcik remarked that Tesla's design appeared "more playful than serious," noting that the two-door layout could present difficulties for older individuals and those with disabilities.
The successful launch of the robotaxi and the ability to penetrate a developing and heavily regulated market will be crucial for Tesla.
This year, Musk abandoned plans for a smaller, more affordable vehicle due to a decline in electric vehicle demand, redirecting efforts towards enhancing Tesla's autonomy goals. He has suggested that the robotaxi venture could elevate Tesla's market valuation to $5 trillion, up from its current valuation of around $700 billion.
"Two-seater vehicles have been suggested for years as options for commuters, yet they have not gained traction," stated Sam Fiorani, vice president at AutoForecast Solutions. He believes Tesla will ultimately need to develop larger robotaxi models.
Blake Anderson, a senior investment analyst at Carson Group, which invests in Tesla, commented that if the Cybercab is intended to be a cost-effective, mass-market option to broaden Tesla's customer base, the two-seat configuration is illogical.
"It seems to be a strategy to bring something to market quickly," he added.