Tesla Inc. faced a significant setback on Thursday, witnessing an abrupt 8.4% decline in its stock price to $241.03. This plunge marked Tesla’s largest single-day percentage drop since January 25, when it fell by 12%, and also concluded its 11-day winning streak. The catalyst behind this sharp decline was a report indicating that Tesla would delay the highly anticipated debut of its robotaxi service by two months. This delay is reportedly aimed at allowing the company to further develop and refine its prototypes.
The announcement had an immediate impact on Tesla’s market performance, pushing its year-to-date gains into negative territory, contrasting with the broader S&P 500 index, which has seen a 17% increase over the same period. Despite the negative market reaction, analysts like Daniel Ives from Wedbush remained optimistic about Tesla’s long-term prospects. Ives acknowledged the negative initial reaction from investors but maintained a bullish outlook, suggesting that the extended timeline could result in a more impressive and technologically advanced robotaxi event. He emphasized that investors are eager for more details on this pivotal development, which could potentially shape Tesla’s future trajectory significantly.
In response to the news, sentiments on social media platforms like Stocktwits turned notably bearish towards Tesla. Reports of the delay raised concerns among investors about the company’s ability to deliver on its ambitious autonomous driving goals. Tesla, however, has not yet provided an official statement or comment regarding the reported delay, leaving investors and analysts alike awaiting further clarification, particularly as the company prepares to announce its second-quarter earnings later in July.
Meanwhile, the stock market reacted in contrasting ways to Tesla’s setback. Competitors in the ride-sharing and autonomous vehicle sectors, such as Uber Technologies Inc. and Lyft Inc., saw their stocks rally following Tesla’s announcement. Uber’s shares surged over 6%, while Lyft’s gained 4.6%, indicating market optimism that the delay in Tesla’s robotaxi rollout might provide them with a competitive advantage in the autonomous vehicle space in the short term.
The upcoming earnings report from Tesla will likely provide further insights into how the market perceives this setback and how Tesla plans to navigate challenges and capitalize on opportunities in the evolving electric vehicle and autonomous driving industries.