Tesla Stock Drops After Underwhelming Cybercab Launch Despite $450 Price Target

Key Insights

• Tesla stock dropped to a crucial support after forming a shooting star candle.
• The company’s cybercab launch was not received well.
• Morningstar hiked the target to $450, citing its valuation.

Tesla stock remained under pressure after investors reacted negatively to the Cybercab launch in Austin. TSLA fell 5.92% on Sept. 4 after reaching $384.04 one day earlier.

The decline came as Tesla faced regulatory scrutiny around Cybercab and weaker Chinese auto demand. Morningstar nevertheless maintained its $450 fair value estimate.

One main reason why Tesla is valued higher than other automakers is that Elon Musk has made some major predictions. One of them is that autonomous vehicles will have a role in the future. It has also moved into robotics through the upcoming launch of Optimus robot.

In line with the autonomous business, the company held an event to demonstrate its Cybercab product. Cybercab is a vehicle that will sit two people and will not have a steering wheel. Tesla hopes to deploy these vehicles to compete with companies like Uber and Lyft.

However, the event’s reception was underwhelming, especially for a product that Musk believes will differentiate it from other automakers. Elon Musk did not appear, and the audience was made up of its employees and some social media influencers. Also, the company did not provide any guidance on the expected sales.

The launch comes at a time when data shows that Tesla’s robotaxi product is not doing all that well. According to Robotaxi Tracker, the company has just 192 vehicles, a year after its launch. In contrast, Waymo, which is owned by Google, has over 4,000 vehicles and its growth is accelerating.

The new developments came at a time when the company is facing some major headwinds in China. When it released its earnings, BYD lamented that the country was becoming highly competitive, which was affecting its growth. BYD’s statement is important because it is the country’s biggest car manufacturer.

Data released last week showed that China’s car sales are falling. They fell by 24% in August to 1.54 million units, and analysts warn that the trend will continue in the foreseeable future. As a result, many companies are expanding abroad to capture new markets there.

Therefore, there is a likelihood that Tesla’s business will slow in the coming months, especially if it fails to offset its Chinese weakness.

Despite these challenges, some analysts believe that the company has more upside to go in the near future. In a statement, a Morningstar analyst said the company is undervalued and raised his target to $450, implying a 24% jump from the current level.

The analyst noted that Cybercab will be a big addition to the company because the cost of operating it will be lower than today’s taxis.

The most recent report showed that the company delivered 480,000 vehicles in the second quarter after producing 450k. This increase helped to push its revenue higher in the quarter. Total revenue rose by 26% to $28.2 billion, while its operating margin narrowed to 1.4%. Its free cash flow turned negative because of its AI investments.

The supplied Tesla stock chart showed an ascending structure developing from late July. TSLA then reached $384.04 on Sept. 3 before reversing sharply.

Friday’s candle displayed characteristics of a shooting-star formation. The pattern typically contains a small body and a long upper shadow after an advance.

That formation can signal rejection from higher prices. However, a single candlestick does not confirm a broader reversal.

The supplied chart also showed Tesla below its 100-day exponential moving average. That keeps the longer-term technical structure under pressure.

The $350-$360 area now serves as the nearer support zone after the Cybercab-driven decline. TSLA traded back near $367 during Sept. 8 trading.

A sustained break below the rising channel would weaken the recent recovery structure. The supplied chart places approximately $320 as the next larger downside area.

That $320 level remains a conditional technical target. Tesla would first have to lose nearby support and remain below the channel.

On the upside, $384 remains the immediate resistance area after last week’s rejection. A sustained move above that level would weaken the bearish technical case.

Investors now face competing signals. Cybercab execution and China remain risks, while Morningstar continues assigning a $450 fair value estimate.

The next measurable catalysts include robotaxi fleet expansion, regulatory developments and third-quarter deliveries. Those data will test whether Tesla can justify its autonomy-driven valuation.

This article is for informational purposes only and should not be considered financial or investment advice. Equity markets remain volatile. Readers should conduct independent research before making investment decisions.

The post Tesla Stock Slips After Cybercab Launch as $450 Target Holds appeared first on The Market Periodical.