Tesla stock’s streak comes to an end due to delay in touted robotaxi reveal

Tesla Inc. has decided to push back the unveiling of its robotaxi to October in order to provide its team more time to create additional prototypes, as per sources familiar with the situation.

The delay, spanning approximately two months, has been communicated internally, with the design team being instructed this week to make adjustments to certain aspects of the vehicle. This decision comes after Chief Executive Officer Elon Musk had set the original date for the event on August 8. Anticipation for the unveiling has contributed to an 11-day period of stock gains, resulting in an addition of over $257 billion to Tesla’s market capitalization. However, upon news of the delay, the stock closed 8.4% lower on Thursday, marking the largest drop since January.

Despite the setback, shares of potential taxi service competitors Uber Technologies Inc. and Lyft Inc. saw an uptick. Uber’s stock rose by 6.1% on Thursday, while Lyft’s shares jumped by 4.6%.

The concept of an autonomous taxi service has been under consideration at Tesla for several years, dating back to Elon Musk’s second “master plan” for the company in 2016. In recent months, Musk has given precedence to this project over the development of a more economical electric vehicle than Tesla’s current most affordable car, the Model 3 sedan.

Although Tesla has faced challenges such as delivering 6.6% fewer cars in the first half of the year and reducing vehicle production by 14% in the second quarter compared to the previous year, the company remains optimistic about its autonomous-vehicle technology. Tesla has developed a suite of features marketed as Full Self-Driving (FSD), despite the fact that FSD requires continuous monitoring and does not make Teslas fully autonomous. Nonetheless, Musk and top engineers have expressed confidence in FSD, particularly as vehicle sales have slowed in recent months.

The postponement of the robotaxi unveiling indicates Tesla’s commitment to delivering a high-quality and innovative product to its customers while continuing to drive advancements in the automotive industry.