After Wall Street balked at Tesla‘s highly-anticipated robotaxi unveiling, CNBC’s Jim Cramer told investors not to make any moves on the stock. While he said he wouldn’t recommend buying Tesla after Thursday night’s event flopped, Cramer discouraged shorting the stock, saying it’s “dangerous to bet against” CEO Elon Musk.
“Even though Tesla’s robotaxi event was gorgeous, we didn’t get enough detail to justify treating this company like an autonomous driving business rather than an electric vehicle maker,” he said. “So, for now, I recommend taking a page from Switzerland and staying on the sidelines with this one.”
Tesla needed a win on Thursday, Cramer said. The stock was hammered earlier this year as the company posted a series of weak quarters. But shares gained traction in the spring as Musk teased self-driving cars, something that could differentiate Tesla from other electric vehicle makers — all of whom potentially face steep competition from Chinese companies.
While impressed by the look and concept of the robotaxi, Cramer said the event’s demonstration lacked substance and failed to prove its technological prowess. Musk provided few details about the actual costs of the vehicle, he added, and gave an “underwhelming” answer when asked about timing of the rollout.
By Friday’s close, Tesla stock was down 8.78%, and Cramer said the market’s reaction speaks for itself. While Tesla plunged, shares of Lyft and Uber rallied, with the latter hitting a new all-time high. The “existential threat” of robotaxis had weighed on the rideshare companies, but Wall Street doesn’t seem to be confident that Tesla’s Cybercab will be usable any time soon, he added.
“Look, Tesla has a big problem: the electric vehicle market turned out to be substantially smaller than was thought,” Cramer said. “If they want to pivot to self-driving cars, they need to really flesh that out, and last night we just didn’t get much in the way of specific details.”