Investing.com -- Shares in Uber Technologies (NYSE:UBER) popped around 5% in premarket trading Friday after Tesla’s much-anticipated Robotaxi event failed to impress investors.
According to Jefferies analysts, Tesla’s “toothless taxi is a best-case outcome for UBER.”
Tesla (NASDAQ:TSLA) unveiled the Cybercab this evening during its much-anticipated robotaxi event. The company plans to roll out full self-driving technology for the Model 3 and Model Y in 2025, starting in California and Texas, with production of the Cybercab expected to begin by 2027.
“We consider the event a best-case outcome for UBER, given TSLA did not provide verifiable evidence of progress toward L3 (level 3) or quantify the number of robotaxis planned,” analysts wrote. “We expect UBER to react positively now that investors can focus on fundamentals.”
Jefferies believes Uber is in a strong position to support sustainable growth for autonomous vehicle (AV) developers.
They expect robotaxis to expand Uber’s mobility market, driving lower prices and increasing rideshare use. The analysts predict AV developers will likely partner with rideshare companies rather than operate standalone fleets.
According to them, Uber is “uniquely well-positioned” to help developers maximize utilization, optimize pricing, manage fleets, and navigate local regulations while addressing consumer adoption challenges.
Tesla shares fell more than 5.5% in the premarket trade.
Separately, Citi analysts shared a similar sentiment, saying the event “clarified Tesla’s vision and timeline for its Robotaxi, and we emerge incrementally positive on Uber shares as a result.”
“We continue to believe Uber is well positioned to benefit from AVs given the size and scale of its driver supply and MAPCs globally and we note its more recent partnership announcements, including Waymo in Austin and Atlanta beginning in ‘25, as tailwinds,” they added, reiterating a Buy rating on the company.
Tesla CEO Elon Musk hinted that each Cybercab vehicle will cost less than $30,000.
According to BMO (TSX:BMO) Capital Markets analysts, scale is important in rideshare, and they project that Tesla will have to spend roughly $100 billion to match Uber’s Driver supply levels.
“Further, Musk did not discuss unit economics or plans to scale the Cyber Cab, which keeps us cautious about these ambitions. Given its global presence, we believe Uber will remain the primary AV distribution partner,” analysts wrote.