Tesla Shares Slide Nearly 6% as Cybercab Robotaxi Debut Draws Federal Safety Audit

Tesla shares fell nearly 6 percent on Friday, erasing most of the week's gains, after a low-key launch event for the company's purpose-built Cybercab robotaxi failed to answer basic questions about the size and pace of its rollout, and after federal regulators opened a formal inquiry into whether the driverless vehicle meets safety rules written for cars with steering wheels.

The stock closed at $354.08, down $22.29, after Tesla began commercial Cybercab service in Austin, Texas, on Thursday night with an invitation-only event that was not livestreamed and that Chief Executive Elon Musk did not attend. Trading volume was roughly 53 percent above its three-month average as investors who had bid the stock up 5.4 percent on Thursday in anticipation of the event reversed course.

Separately, the National Highway Traffic Safety Administration announced it had opened an audit query into how Tesla certified that the two-seat Cybercab, which has no steering wheel, pedals or mirrors, complies with federal motor vehicle safety standards written with human drivers in mind.

The numbers

Tesla had registered 45 Cybercabs with the Texas Department of Motor Vehicles ahead of Thursday's launch, bringing its total automated-vehicle fleet in the state to 420, according to the state's official registry — the rest are Model Y robotaxis that still carry a human safety monitor. That is a fraction of the nearly 1,000 vehicles Alphabet-owned Waymo has registered for commercial service in Texas. Nationally, Waymo now provides more than 500,000 paid autonomous rides a week across roughly a dozen cities, a figure it has been doubling roughly every year.

The audit query, filed by the agency's Office of Defects Investigation, covers an estimated 1,000 Cybercab vehicles and was opened the same day Tesla began commercial operations. Tesla's own description of the Cybercab calls it a two-seat vehicle built exclusively for autonomous ride-hailing, with no manual controls and no way for a human occupant to take over driving.

How Tesla got here

Musk has for more than a decade told investors and analysts that Tesla was close to solving full self-driving and that a purpose-built robotaxi would eventually anchor the company's valuation more than its car business. The company unveiled a Cybercab concept in 2024, and Tesla began a limited, supervised robotaxi pilot in Austin using modified Model Y vehicles the following year. Thursday's event marked the first time paying members of the public, rather than employees or invited testers, were carried in the finished Cybercab.

The regulatory scrutiny follows a well-worn path. Amazon-owned Zoox self-certified a similarly steering-wheel-free robotaxi in 2022 without first seeking an exemption from NHTSA, prompting a multi-year audit that slowed its path to commercial service; Zoox did not win approval to operate without the exemption until this year. NHTSA's press release on the Tesla inquiry noted that the agency is in the process of rewriting eight separate vehicle-safety rules — covering equipment such as brake pedals, mirrors and windshield wipers — to accommodate driverless vehicles, but said that "existing standards remain in force" until that rulemaking is complete.

The immediate hit falls on Tesla shareholders, who have increasingly been asked to value the company on the promise of autonomous ride-hailing and humanoid robotics rather than car sales, which have slowed in key markets this year. A slower or legally contested robotaxi rollout also matters to Uber and Lyft, whose ride-hailing businesses Tesla and Waymo are both trying to disrupt, and to Austin riders and city officials who have watched the service expand block by block. Tesla employees working on the Cybercab program face the prospect of a longer, more document-intensive path to nationwide deployment if the audit query broadens, as happened with Zoox.

Reaction

Wall Street's reaction to Thursday's event was notably cool for a company whose stock often rallies on Musk's forward-looking claims. Wells Fargo analyst Colin Langan, who holds an underweight rating and a $130 price target on the stock, wrote that "given the limited update and lack of surprises typically expected at TSLA events, the launch likely fell short of investor expectations." Other banks were less severe but still guarded: JPMorgan and Goldman Sachs both kept neutral ratings, while Morgan Stanley said further evidence of fleet expansion would be needed to justify the stock's valuation. The spread between Wells Fargo's $130 target and RBC Capital Markets' $480 target, built on a forecast of roughly 40,000 Tesla-owned Cybercabs by 2030, illustrates how far apart analysts remain on what the robotaxi business is actually worth today.

Individual investors who follow Tesla closely were similarly split. Future Fund managing director Gary Black, a longtime Tesla bull, wrote that the event was "largely a bust despite efforts to control the narrative," while Deepwater Asset Management's Gene Munster was more forgiving, predicting Tesla would add roughly 300 Cybercabs in Austin over the coming month even without official guidance from the company.

NHTSA, for its part, framed its inquiry as a routine check rather than an effort to block the technology.

"NHTSA fully supports the safe development and deployment of automated vehicles. But as the federal regulator, we need to ensure that all of our laws are followed," said NHTSA Administrator Jonathan Morrison. "Our approach of balancing innovation with safety oversight will allow the United States to maintain its global leadership in AV innovation."

The broader market was calmer. The S&P 500 slipped 0.38 percent and the Nasdaq Composite fell 0.29 percent on Friday, meaning Tesla's decline was several times steeper than the market as a whole and was treated by traders as a company-specific event rather than a sector rotation. Rivian and General Motors, the two other automakers most often compared with Tesla on autonomy timelines, moved only modestly on the day.

What happens next

NHTSA's audit query gives the agency broad authority to demand the underlying engineering data and test records Tesla used to self-certify the Cybercab, and to refer the matter for a formal investigation or recall proceeding if it finds the certification unsupported. The agency has not set a public deadline for concluding the review. Tesla, whose investor-relations site has so far issued no supplemental disclosure about the audit beyond its routine securities filings, has said only that it plans to expand the Cybercab fleet gradually across Austin and into additional cities, without specifying a timeline.

Investors are likely to look for more concrete detail at Tesla's next scheduled earnings call, where analysts are expected to press management on fleet-expansion numbers, the cost of scaling Cybercab production, and how the company plans to respond to the audit query. Until then, the stock's reaction this week suggests that promises about the pace of autonomy are being judged against a rising bar of proof, particularly with a well-funded, faster-scaling rival in Waymo already carrying half a million paying passengers a week.