Uber Shares Rise 5% Following ‘Toothless’ Robotaxi Event

Shares in Uber Technologies experienced a rise of approximately 5% in premarket trading on Friday after Tesla’s highly anticipated Robotaxi event failed to garner investor enthusiasm.

Analysts from Jefferies suggested that the outcome of Tesla’s event could be seen as favorable for Uber. During the event, Tesla unveiled the Cybercab and announced plans to roll out full self-driving technology for its Model 3 and Model Y vehicles by 2025, starting in California and Texas. Production of the Cybercab is expected to commence by 2027.

Jefferies pointed out that Tesla did not provide concrete evidence of its progress towards achieving level 3 autonomous driving or specify the expected number of robotaxis. This situation allows Uber to shift investor attention back to its fundamental business strengths.

The analysts expressed confidence in Uber’s potential to support sustainable growth for autonomous vehicle developers. They foresee that the introduction of robotaxis could expand Uber’s mobility market, leading to lower prices and increased rideshare usage. They also believe that autonomous vehicle developers will likely seek partnerships with rideshare companies like Uber rather than operating their own fleets.

According to Jefferies, Uber is “uniquely well-positioned” to assist developers in maximizing utilization, optimizing pricing, managing fleets, and navigating local regulations while addressing potential challenges related to consumer adoption.

In contrast, Tesla’s shares fell by more than 5.5% in premarket trading.

Citi analysts echoed this sentiment, stating that the event provided clarity on Tesla’s vision and timeline for its Robotaxi. They expressed an increasingly positive outlook on Uber’s shares as a result. They emphasized that Uber’s extensive driver supply and recent partnership announcements, including collaborations with Waymo in Austin and Atlanta set to begin in 2025, position the company favorably in the evolving landscape of autonomous vehicles.

Tesla CEO Elon Musk hinted that the price of each Cybercab vehicle would be less than $30,000. However, analysts from BMO Capital Markets highlighted the importance of scale in rideshare operations, estimating that Tesla would need to invest approximately $100 billion to match Uber’s driver supply levels.

Moreover, Musk did not provide specific details regarding the unit economics or plans for scaling the Cybercab, prompting caution among analysts about Tesla’s ambitions. They believe that Uber will continue to be the primary partner for the distribution of autonomous vehicles on a global scale.