Cybercab officially launches tonight! Morgan Stanley: This event is far more significant than ever before, with the expansion of the Robotaxi fleet being the biggest highlight.

Tesla's Cybercab launch event is being held tonight in Austin, Texas, marking a significant milestone in the commercialization of Tesla's autonomous driving technology.

According to the trading platform, Morgan Stanley pointed out in its latest research report that the significance of this announcement far exceeds that of any previous product event—the large-scale expansion of the unsupervised Robotaxi fleet will directly determine the direction of Tesla's stock price this year.

In a report, Morgan Stanley analyst Andrew S. Percoco explicitly pointed out that data from the Texas Department of Motor Vehicles (DMV) shows that Tesla has recently registered approximately 45 Cybercabs for commercial operation, giving the bank a positive outlook for tonight's launch event. If Tesla can successfully deploy 25 to 50 Cybercabs in Texas for paid passenger service within days to weeks of the launch event, the stock price is expected to react positively. Conversely, if the event only results in a limited supervised retail demonstration without substantial unsupervised fleet deployment, the stock price is expected to face downward pressure after the event.

Meanwhile, data from a third-party Robotaxi tracking website shows that Tesla's unsupervised Robotaxi fleet has expanded by about 200% since the end of June, from 57 vehicles on June 30 to 156 vehicles on August 31.

Morgan Stanley believes this metric is one of the most important key performance indicators for tracking Tesla's autonomous driving business in the second half of the year, and the continued expansion of the fleet will gradually clarify market expectations for Tesla's high return on capital expenditures.

The stock price moves in two completely different ways in these two scenarios.

Morgan Stanley outlined two distinct scenarios for tonight's launch event in its report.

In an optimistic scenario, Tesla simultaneously launches its unsupervised Cybercab paid ride-hailing service in Austin, Houston, and Dallas, and expands its Texas fleet to 25 to 50 vehicles shortly after launch. Morgan Stanley emphasizes that the market needs to see more than just a "few few" (approximately 5 to 10) vehicles on the road; large-scale deployment is the key to triggering positive momentum in the stock price.

In a pessimistic scenario, if the event focuses solely on retail demonstrations and lacks substantial commercial fleet deployment, it will be difficult to reignite market enthusiasm for Tesla's Robotaxi business. Morgan Stanley predicts that the stock price will correct after the event in this scenario.

Notably, Morgan Stanley analysts spotted a Cybercab on the streets of New York this weekend and noted that research from their AlphaWise team showed an increase in remote operator hiring in the New York area, suggesting that Tesla is laying the groundwork for a potential expansion into the New York market, even though New York is not a target market that Tesla has recently publicly announced.

Regulatory progress provides additional support

On the regulatory front, Tesla recently received approval from the Nevada Department of Transportation for its Autonomous Vehicle Network Operational Capability (AVNC) application, a positive sign for the advancement of Robotaxi in the Las Vegas market.

According to third-party reports, this approval replaces the previous temporary permit that limited Tesla's vehicle count to 10, authorizing Tesla to operate up to 5,000 fully autonomous vehicles over the next 12 months. However, Tesla expects to start small and expand gradually.

Morgan Stanley points out that the permit still comes with several important operational conditions, including an approved Operating Design (ODD) and geofencing requirements, human oversight mechanisms, accident reporting obligations, and administrative matters such as vehicle inspections, insurance, and rate filings. All of these conditions must be met before the paid public service can officially commence operations. Las Vegas and Phoenix were previously listed as "ready to launch," and this regulatory breakthrough in Nevada provides additional support for the overall Robotaxi expansion path.

Cybercab sets off to run alongside the Model Y fleet.

From an operational preparation perspective, Tesla has completed a number of preliminary tasks in preparation for tonight's launch.

Since June, Cybercab has been testing on public roads in multiple U.S. locations, including Austin. In July, Tesla began allowing employees to test drive on private roads at its Austin campus and collect feedback, a process highly similar to that before the Robotaxi launch last year. Tesla has also provided specialized training to first responders in Austin, instructing them on how to handle and move vehicles in emergency situations.

Currently, Tesla's Robotaxi operation in Austin primarily uses modified Model Ys, with 186 Model Ys registered for the service according to Texas DMV data. The Cybercab, designed specifically for fully driverless operation, requires no additional modifications and theoretically reduces operational complexity. However, whether Tesla will gradually replace the Model Y with the Cybercab or operate both in parallel remains unclear.

Fleet size is a key variable for stock price this year.

Morgan Stanley maintains its Equal-weight rating on Tesla with a target price of $400, compared to the current share price of $356.09. In the bank's sum-of-the-parts (SOTP) valuation model, the Robotaxi business (Tesla Mobility) contributes $120 per share, making it the second-largest source of value after network services ($144 per share).

Morgan Stanley explicitly stated that the continued expansion of Tesla's unsupervised fleet—whether Cybercab or Model Y—is the core driver of its stock price outperforming the market this year. As the return on high capital expenditures becomes clearer, a repricing of Tesla's autonomous driving business by the market will become possible. Conversely, if fleet expansion stalls, execution risk, regulatory uncertainty, and valuation pressure will become the main downside risks.

Tonight's launch event in Austin will provide the most direct answer to this crucial question.

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