Tesla shares jump as investors buy into Musk’s robotaxi hype

When Elon Musk announced he’ll unveil a Tesla Inc. robotaxi in August, it was a clear attempt to arrest a spiral for the once high-flying carmaker.

Tesla shares already had been sinking before the company reported anemic quarterly delivery figures on April 2. Days later, Reuters reported the automaker was shelving plans for a cheaper electric vehicle, extending the tailspin. Musk’s vague denial didn’t do the trick — the stock closed last week as the worst performer in the S&P 500 this year.

So the chief executive officer turned to his triedand-true playbook: change the narrative by dangling a new product. The shares jumped in late trading on Friday and rose as much as 5% by 10 a.m. Monday in New York.

Splashy events have long been part of Tesla’s strategy to generate buzz while spending next to nothing on traditional advertising. Musk has mastered the craft of keeping investors focused on the future instead of current pain points, though it usually takes years for Tesla put products that its CEO shows into production.

As for robotaxis, Musk has failed to make good on more than a decade of predictions about autonomous vehicles.

“Investors need to curb some of their enthusiasm with this stock and its various product announcements, as there tends to be a wide chasm between hype/speculation and reality,” Adam Crisafulli, the founder of analysis firm Vital Knowledge, said by email. “This seems to be an example of Tesla trying to distract from the current EV market conditions, which are very bleak at the moment.”

When Tesla started work on the system it markets as Autopilot in 2013, Musk estimated it would be able to handle 90% of the miles customers drove within a few years. In 2016, Musk alluded to autonomy in a second iteration of his master plan for the company, and Tesla started selling a feature called Full Self-Driving, or FSD.