Uber Analysts Unfazed By Tesla's CyberCab Reveal, Eye Stronger AV Position

Tesla Inc's TSLA recent "We, Robot" event, which showcased the CyberCab and RoboVan, left many wondering how it might impact the rideshare space.

But for Uber Technologies Inc UBER investors, the consensus among analysts seems to be that while Tesla’s autonomous vehicle (AV) ambitions are bold, the near-term competitive threat remains minimal.

Analysts from Bank of America Securities and Truist Securities offered insights into the ramifications, seeing a largely positive outlook for Uber.

BofA Securities: ‘Less Near-Term Tesla Overhang‘

BofA Securities analyst Justin Post reiterated his Buy rating on Uber with a price target of $88, highlighting that Tesla's event was less of a disruptive force for Uber than anticipated.

Post noted that Tesla’s CyberCab, a robotaxi designed without a steering wheel or pedals, could potentially lower transportation costs to 30 cents to 40 cents per mile, far below Uber's current driver cost of over $2 per mile. However, Post found relief in the lack of concrete details on a rideshare app timeline. As he put it, "No specific business model or timeline was given for a rideshare app or FSD city launch, a potential positive for Uber."

Moreover, Post remains confident in Uber's positioning within the AV ecosystem: "We continue to see Uber as an AV beneficiary, with possibly less near-term Tesla overhang."

He further noted that Tesla's event didn't deliver any immediate threats, stating, "The event lasted only 19 minutes with less concrete details & timelines than feared for Uber."

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Truist Securities: ‘Uber Positioned As A Winner In The AV Arms Race‘

Truist Securities analyst Youssef Squali shared a similar view, reiterating a Buy rating on Uber.

Squali highlighted Uber’s strong potential as a key partner for AV companies like Waymo. He noted, "We continue to see Uber as a winner in the long run in the AV arms race," thanks to its scale, brand, and logistics capabilities, which put Uber in a favorable position to collaborate with AV developers.

According to Squali, "Uber’s global geographic footprint provides it with an inherent advantage as it can test and iterate with AV partners across the globe."

In the long term, Squali envisions much of the value in the AV space accruing to the marketplace owner. "We believe much of the value should accrue to the player who controls the marketplace or the distribution over time — in this case Uber," he emphasized.

Tesla’s Event Not A Near-Term Threat for Uber

While Tesla’s CyberCab and RoboVan may eventually reshape the rideshare industry, both analysts agree that Uber's position remains strong in the immediate future.

Without a near-term Tesla threat, Uber's existing AV partnerships and robust platform keep it well-positioned for growth.

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Photo courtesy of Tesla.