There was no livestream and the media wasn’t invited. We didn’t even see a euphoric Elon Musk embarrassing himself on stage.

Tesla’s rollout of its two-seater Cybercab robotaxis on the streets of Austin, Texas, this month left investors scratching their heads. With little fanfare, the company stated on Musk’s social media platform X that “Cybercab rides” would “open to public” on September 4.

The “Cybercab event was largely a bust,” tweeted Future Fund Advisors co-founder Gary Black at the time. “The launch offered little detail and key questions remained unanswered.”

The lack of enthusiasm has reignited concerns over the company’s ability to catch up with some extremely steep competition. Its fleet remains extremely small and limited to a geofenced area of Austin. Major regulatory hurdles could make expansion into other states exceedingly challenging. Early testing and data gathering in New York City required the company to install steering wheels and hire human drivers for its Cybercabs, effectively turning them into glorified — and cramped — Tesla EVs.

Investors are already peering through the thin coating of gaudy, gold-colored paint. As a group of asset managers and traders, who — perhaps ironically — refer to themselves as the “Bears of Wall Street” noted in a post on Seeking Alpha, they’re maintaining a “rating of Sell for Tesla.” That’s in large part due to “mounting risks,” such as a “negative free cash flow, surging [capital expenditures] above $25 billion, intensifying competition, and regulatory audits delaying robotaxi expansion.”

The Cybercabs are one of three pillars Musk has bet the fate of Tesla on, along with its humanoid robot Optimus and AI. But without any meaningful strides almost two years after Musk first showed off its robotaxi to the world, investors are left wanting a lot more.

That’s especially true as regulators are starting to ask some tough questions, with the National Highway Traffic Safety Administration opening a probe into the safety certification of its Cybercabs.

The company is also looking to a spend over a whopping $25 billion this year and taking on even more debt, with a “borrowing capacity” of up to $30 billion, as it attempts to stay relevant in the fast-moving AI race.

“Capex will grow for the next two or three years as we expand our Robotaxi fleet, expand our production capacity for Optimus, make investments for semiconductor fab, install solar manufacturing capacity, and AI compute infrastructure, in addition to all the other expansions we’ll do for other manufacturing for automotive,” the company’s CFO Vaibhav Taneja told investors in July.

Waymo continues to run circles around the company, offering its services across ten US metropolitan areas and providing half a million paid rides per week.

Meanwhile, its core business of selling cars continues to atrophy. While delivery numbers have recovered somewhat from a disastrous 2025 performance, the numbers still have a lot of ground to regain.

Then there’s the specter of a possible merge with Musk’s SpaceX, which is looking increasingly likely, at least in the long run. It’s a highly risky move that could saddle Tesla with even more debt.

“All of those risks make us believe that Tesla remains greatly overvalued even after the volatility of the last two months,” the Bears of Wall Street argued, valuing the company’s stock at “around 78 percent below the current market price.”

“The Cybercab launch was the catalyst that was supposed to justify Tesla’s valuation, and it delivered almost nothing that investors could measure,” the group concluded. “Instead of a fleet expansion plan, the company got a federal investigation, while its main competitor keeps adding cities.”

More on the Cybercab: Oops! Many Tesla Cybercabs Actually Do Have Steering Wheels, Undercutting a Core Promise