Investors Reject Tesla's Driverless Dreams, but Stock Value Remains High

Investing

Published: October 11, 2024 6:40 am

24/7 Wall St. Insights

Following the unveiling of its Cybercab, Tesla Inc. (NASDAQ: TSLA) stock tumbled.
However, investors still believe the EV leader has a bright future.
Also: Dividend legends to hold forever.

Based on the price of Tesla Inc. (NASDAQ: TSLA) shares, investors still believe that the company will build the cars that will be the wave of the future. Not everyone agrees.

Elon Musk, CEO of Tesla, presented two new products at an LA event. As soon as the market opened, the stock started to sell off. The reasons were simple: Some attendees said the technology behind the products needed to be more transparent, and the production dates were far off and may have been missed altogether.

Tesla’s Cybercab and the Robovan

Tesla CEO Elon Musk — The unveiling of Tesla’s Cybercab and Robovan.

The upcoming Tesla “Cybercab” will be available for less than $30,000. Many experts believe that today’s adoption of EVs is slow because they are too expensive. Analysts have said a price point of around $25,000 is critical to boost sales. Chinese companies, led by BYD, already have electric vehicles (EVs) priced below $25,000. However, 100% tariffs essentially block their sales in the United States.

Another essential aspect of the Cybercab is that it will be truly self-driving. Companies like Waymo and GM’s Cruise are working on similar technologies, as are several Chinese EV companies. None has created a car that requires no driver’s attention at all. Musk insists that self-driving cars will soon be safer than those controlled by humans. The Tesla Cybercab does not have a steering wheel, accelerator, or brake pad. Local and state regulations will be a part of how quickly these can be rolled out completely.

Garrett Nelson, an analyst at CFRA Research, told the Financial Times, “He was disappointed by the lack of clarity for Tesla’s near-term product road map.” He added, “We think the event did little to change an opaque intermediate-term earnings outlook.” Investors with similar sentiments drove the share price drop immediately.

Musk also showed a new Robovan. It can carry at least 20 people and serve as a small bus or large passenger car. Musk did not give a date for its release. Production of the Cybercab will start in 2026.

Investors still believe Tesla has a bright future compared to legacy manufacturers. Tesla has a market cap of $750 billion. Ford’s is $45 billion.

Will China Take a Big Bite Out of Elon Musk’s Tesla?

Travel Cards Are Getting Too Good To Ignore

Credit card companies are pulling out all the stops, with the issuers are offering insane travel rewards and perks.

We’re talking huge sign-up bonuses, points on every purchase, and benefits like lounge access, travel credits, and free hotel nights. For travelers, these rewards can add up to thousands of dollars in flights, upgrades, and luxury experiences every year.

It’s like getting paid to travel — and it’s available to qualified borrowers who know where to look.

We’ve rounded up some of the best travel credit cards on the market. Click here to see the list. Don’t miss these offers — they won’t be this good forever.