Tesla falls 8.4% overnight after delaying unveiling of robotaxi

Tesla shares fell 8.4% to $241 after reports said the company had postponed the planned August 8 unveiling of its robotaxi by about two months.

Reports said the company is focusing on building additional prototypes before it unveils the product.

The robotaxi is Tesla CEO Elon Musk’s latest focus area as the company aims an autonomous taxi service, which analysts believe could power the next leg of Tesla’s growth.

Tesla, which disrupted the global auto industry, by producing the world’s first mass electric vehicle (EV) products, has seen growth slow, with 6.6% fewer sales in the first half of the year, compared to the same period last year.

However, Tesla shares jumped from $170 in June to $263 in July amid hope the robotaxi unveiling and subsequent launch will help the company pull additional levels for growth.

Tesla shares are down from a peak of $407 reached in July 2021, as the company started facing multiple challenges: legacy auto companies firming up their EV plans, growth slowing in Tesla’s key China market, revenues slowing from its carbon credit sales as well as controversies surrounding its mercurial CEO Musk.

Among other challenges faced by Tesla include its focus on its “full self-driving” suite, a feature that, while having more advanced capabilities than the competition, has come into question over claims of being “fully autonomous” amid accidents and regulatory scrutiny.

Tesla’s revenues nearly quadrupled between 2019 and 2023, going from $25.6 billion to $97 billion while it clocked a profit of $15 billion in 2023 compared to a loss of $870 million.

However, sales have held around the $25 billion mark for the past five quarter, indicating stagnancy in sales.

Among other plans, Tesla plans to launch a new Model 2, a low-cost car pegged at $25,000, with analysts hoping the car would help power growth in emerging markets.