CNBC’s Jim Cramer advised investors against making any moves on Tesla’s stock following the highly-anticipated robotaxi unveiling. While he didn’t recommend buying the stock after the event, he also discouraged shorting it, noting that it’s risky to bet against CEO Elon Musk. Cramer suggested staying on the sidelines for now, as Tesla didn’t provide enough detail to justify treating the company as an autonomous driving business rather than an electric vehicle maker.
Tesla was in need of a win on Thursday, as the stock had faced criticism earlier in the year after posting weak quarters. Despite gaining traction in the spring as Musk teased self-driving cars, Cramer felt that the robotaxi event lacked substance and failed to demonstrate the company’s technological capabilities. He noted that Musk provided minimal information on the costs of the vehicle and gave an unsatisfactory answer on the timing of the rollout, leaving investors uncertain.
Following the robotaxi event, Tesla’s stock dropped by 8.78% by Friday’s close. In contrast, shares of Lyft and Uber rallied, with the latter reaching a new all-time high. While the concept of robotaxis had been seen as an “existential threat” to rideshare companies, the market’s reaction to Tesla’s unveiling suggested a lack of confidence in the readiness of the Cybercab. Cramer acknowledged Tesla’s challenges in the electric vehicle market and emphasized the need for more specific details on the self-driving car pivot.
The electric vehicle market was perceived to be smaller than anticipated, posing a challenge for Tesla as it looked to differentiate itself through self-driving cars. However, Cramer emphasized the lack of detailed information provided during the robotaxi event, indicating that Tesla needed to flesh out its plans for self-driving technology. Without a clearer roadmap and timeline for implementation, investors remained skeptical about Tesla’s ability to successfully transition to self-driving cars and compete effectively in the market.
In conclusion, Cramer’s cautionary advice to investors reflected the disappointment in Tesla’s robotaxi unveiling and the lack of concrete details provided by Musk. While the concept of self-driving cars was appealing, the event fell short in convincing Wall Street of Tesla’s readiness to pivot away from being solely an electric vehicle maker. The market’s reaction, with Tesla’s stock decline and Lyft and Uber’s rally, highlighted the uncertainty surrounding Tesla’s future in autonomous driving technology. For now, staying on the sidelines and awaiting more clarity on Tesla’s plans may be the prudent approach for investors.
