Tesla shares declined 6% on Friday following the company’s recent update on its highly anticipated Cybercab, which failed to meet investor expectations. The Cybercab, a two-seat, fully autonomous robotaxi without a steering wheel or pedals, has been in production since April and was first revealed nearly two years ago. Tesla held a private event in Austin, Texas, to showcase the vehicle, but CEO Elon Musk did not attend, and the presentation was not livestreamed, a departure from Tesla’s usual public product launches.

Investors and analysts expressed disappointment due to the lack of fresh information during the event. Key questions remain unanswered regarding the Cybercab’s pricing, production pace, and regulatory approval timeline, which has contributed to investor uncertainty. RBC Capital Markets analysts highlighted these gaps while maintaining a buy recommendation on Tesla stock. The company also announced that users of its Robotaxi ride-hailing app can now experience driverless trips within a limited “geofenced” area in Austin.

Adding to the challenges, the National Highway Traffic Safety Administration (NHTSA) initiated an audit query to verify whether Tesla’s Cybercab meets federal safety standards. This probe is aimed at evaluating Tesla’s self-certification process for the vehicle’s safety on public roads. Meanwhile, some early users reported issues with the Robotaxi service, including routing errors, missed destinations, and excessive wait times, which has raised concerns about the system's operational readiness.

The market reaction followed a prior 5.4% gain on Thursday ahead of the event, reflecting a stark turnaround driven by skepticism over the Cybercab’s immediate prospects. Wells Fargo analysts described the launch event as underwhelming, noting execution challenges faced in Tesla’s Austin robotaxi operations. As Tesla continues to compete with incumbent autonomous vehicle players like Alphabet’s Waymo, the road ahead for Cybercab’s widespread adoption and regulatory clearance remains uncertain.