Key Takeaways

Tesla (TSLA) CEO Elon Musk took to his social media platform X Friday to announce that the electric vehicle (EV) maker will unveil its long-awaited robotaxi on Aug. 8, posting "Tesla Robotaxi unveil on 8/8." Shares of Tesla surged nearly 4% to $171.19 in extended trading Friday following the announcement, after sinking 3.6% during the regular session.

The announcement came just hours after Elon Musk denied a report that the EV maker was canceling plans to build a lower-priced car, and would focus on an autonomous vehicle that would render other vehicles obsolete.

The robotaxi is a next-generation self-driving vehicle that Musk said at an investor event in 2019 could one day allow owners to make money by renting their vehicles out by operating an autonomous taxi service, in which the company would also take a commission.

However, Musk's plans for a robotaxi have been hit with delays, with the company suggesting in 2019 that robotaxis would be operating by 2020. The only criticism and its a fair one, sometimes Im not on time," Musk reportedly said.

A possible headwind for Tesla and its robotaxi could be convincing regulators that its self-driving technology is safe. The company was forced to recall thousands of vehicles last year, after the National Highway Traffic Safety Administration (NHTSA) said Tesla's Full Self-Driving (FSD) Beta software could cause Tesla cars to "exceed speed limits" or travel in an "unsafe" or "unpredictable" manner.

Tesla has had a rough start to 2024 amid sluggish demand and intense competition, with shares losing about one-third of their value since the year began.

Earlier in the week, Tesla reported its first-quarter deliveries dropped 8.5% from a year ago, sending shares tumbling after the release. Tesla blamed the decline in volumes in part on factory shutdowns as a result of the Red Sea conflict and an arson attack at Teslas Berlin Gigafactory.

Last month, analysts atWells Fargo called Tesla"a growth company with no growth," while some other analysts have suggested the recent selloff was overdone.

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Elon Musk Says Tesla Will Unveil Robotaxi in AugustHere's What You Need To Know - Investopedia