Tesla ETFs were slammed on Friday after the highly anticipated reveal of the company’s Cybercab self-driving taxi, or robotaxi, failed to impress investors.
Shares of Tesla dropped as much as 10%, fueling a more-than 20% loss for the Direxion Daily TSLA Bull 2X Shares (TSLL).
Tesla CEO Elon Musk unveiled the Cybercab at an event near Los Angeles, California Thursday evening. While the vehicle, with no steering wheels or pedals, was a prototype, it awed many in attendance with its slick look and design.
Investors were another matter. Musk’s comments that the robotaxi would begin production in 2026 frustrated those who had hoped it would hit the market sooner.
The Tesla CEO has often offered optimistic predictions for when the robotaxi would be ready, but the timetable has continually been pushed back.
Gene Munster, Managing Partner at Deepwater Asset Management, tweeted that the long wait for the Cybercab was the reason for Friday’s sell-off in shares of Tesla.
“Timing of Cybercab is still two plus years away, too far for the incremental investor to put much weight into the opportunity and the timing asks existing investors to continue the waiting game,” he wrote.
“The disappointment makes sense. Tesla investors have been waiting for a few things recently including improving margins, higher delivery growth rates and FSD.”
Still, Munster remained bullish on the company, remarking that he feels that the Cybercab “falls squarely into the ‘worth the wait camp’, and even if it’s three years before it sees the light of day, investors will be rewarded.”
Cheaper Teslas Coming?
Munster also noted that there was some disappointment among investors about Tesla saying nothing about releasing a potential cheaper electric vehicle model.
Munster predicted that a cheaper model was still in the works and that initial production could begin in late 2025.
“The reason why they held off was there is little reward for them to highlight a cheaper model given it risks buyers hitting the pause today on Model 3 and Y,” he speculated.
Nearly 270 million Tesla shares are held in 341 U.S.-traded ETFs, according to etf.com data. The Invesco QQQ Trust (QQQ) is the largest holder, with approximately 36 million shares. The largest allocation to TSLA stock TSLL, with a portfolio weight of 53%. On average, U.S. ETFs allocate 2.49% of Tesla to their portfolios.