When Tesla revealed a robotaxi designed as a low-slung, two-seater, sporty coupe — the exact opposite of a typical taxi with room for multiple passengers and luggage — investors and analysts panicked.
CEO Elon Musk unveiled the sleek design for a prototype of a Tesla robotaxi called CyberCab at a much-hyped event near Los Angeles late Thursday night. They will begin production sometime in 2026, he said, and will cost less than $30,000 a pop.
But in true Musk style, he left out expectations about how the two-seat robotaxi would meet the needs of a restaurant or families headed to the airport, or whether he hoped these would only attract a niche clientele.
Tesla shares fell 9% on Wall Street on Friday as investors mocked the design and lack of financial details.
“When you think of a cab, you think of something that will hold more than two people,” said Jonathan Elflan, director of vehicle testing for the automotive website Edmunds.com. “It’s just too confusing to make it a two-seat car.”
Tesla did not respond to an email seeking comment.
Experts said robotaxis will best emulate regular taxis with plenty of space, tall design and sliding doors. Musk demonstrated a futuristic RoboVan that can seat 20 people but did not say when it would be available.
The market for two-door robotaxis will be very limited, said Sandeep Rao, a senior researcher at Leveraged Shares, an investment management company with about $1 billion in assets, including Tesla.
Excluding SUVs and pickups, two-door vehicles account for just 2% of car sales in the US, according to data from analytics firm JD Power.
Musk said he wanted to make robotaxis cheaper to operate than mass transit and predicted an operating cost of 20 cents per mile over time for the CyberCab.
But he didn’t say how quickly Tesla could mass-produce the Cybercab and secure regulatory approval, or how it might beat Alphabet’s Waymo, which already operates robotaxis in some US cities.
Waymo has a fleet of about 700 Jaguar Land Rover cars that can seat four passengers, similar to the seating capacity of Amazon’s Zoox robotaxis.
Former Waymo CEO John Krafcik said Tesla’s design looks “more playful than serious” and that the two-door configuration presented challenges for older passengers and those with disabilities.
‘More playful than serious’
Delivering robotaxi and capturing this still emerging and tightly regulated market will be important for Tesla.
Musk this year scrapped plans to build a smaller, cheaper vehicle amid slowing demand for EVs and focused on pursuing Tesla’s autonomy ambitions. He has said that the robotaxi business could push Tesla’s valuation to $5 trillion, from about $700 billion now.
“Two-seat vehicles have been proposed as commuter vehicles for decades. They haven’t taken off yet,” said Sam Fiorani, vice president of research firm AutoForecast Solutions. Tesla will eventually need to build larger robotaxis, he said.
Blake Anderson, senior investment analyst at Tesla investor Carson Group, said that if the CyberCab is supposed to be a low-cost, mass-market model to increase Tesla’s appeal, the two-seat design doesn’t make sense.
“This is probably a way they can get something to market quicker,” he said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
