Shares of TSLA are down around 6% in premarket trading for two reasons:

1. Cybercab Timing: The Cybercab is still more than two years away, which is too distant for incremental investors to place much weight on the opportunity. This timeline also requires existing investors to continue playing the waiting game.

My take: The disappointment is understandable. Tesla investors have been waiting for several things lately, including improved margins, higher delivery growth rates, and advancements in FSD. I believe the Cybercab falls firmly into the ‘worth the wait’ category, and even if it’s three years before it comes to market, investors will be rewarded.

2. No Update on the ‘More Affordable’ Model: There was no mention of the cheaper model that Elon suggested would be available sometime between late this year and mid-2025.

My take: I believe the more affordable car is still in the works. My guess is that initial production will begin in late 2025. Tesla likely held off on highlighting the cheaper model because it could discourage potential buyers from purchasing the Model 3 and Model Y today.

What will likely grab headlines following the unveiling of the two-seater, fully autonomous (no steering wheel or pedals) Cybercab, is Musk’s comment that the vehicle is expected to be released by the end of 2026.

That takeaway, however, misses the point.

After demoing the vehicle, it became clear that the company has found the right balance between form and functionality. The autonomous drive was smooth, feeling more natural than any of the FSD betas I’ve experienced. Even if some of the fit and finish was due to the controlled, closed-loop nature of the demo on Warner’s back lot, the demonstration was impressive.

As for the impact on the business model, if Tesla can capture 20% of the U.S. ride-sharing market by 2030, that would add about 10% to operating income. If they were to reach 30% market share, which is unlikely, it would add 15%. As for Cybercab sales revenue, it would likely take about 80k vehicles to service 50% share of the US market. Those purchases will be staggered over 3-4 years, which translates to about $600m in annual revenue, or less than 1% of the 2030 estimates.

After spending time with the Optimus bots at the event, it was clear that the project is more advanced than I expected.

Pros: They interacted with the crowd, exhibited smooth hand and neck movements, and displayed a human-like personality with jokes.

Cons: Movements were on the slower side, and it still clearly felt like a robot as opposed to a humanoid.

Bottom line: Optimus has officially moved from a prototype to the pilot phase. While there’s still a long way to go (about five years), the bot segment is now on investors’ radar.

Regarding timing, no specific details were given. My sense is that it will be a few years before the first commercial deployments. As for pricing, Musk suggested that Optimus will be priced at $20k-$30k ‘long term.’ This type of phrasing, particularly in reference to timing, makes me believe it will be 2030 at the earliest before they hit that price point.

While I was glad to see the company check the box by announcing they’re working on the important high-occupancy vehicle (up to 20 people), it was clear the prototype still has a long way to go.

I would describe the form factor more as a living room on wheels than a van, which leads me to believe that the design will need to be reworked for real-world application.

My recommendation to Tesla is to take a page from the Cybercab design, which is well-suited for its ride-sharing use case, and redesign the Robovan to be more like an actual van.

Disclaimer