Tesla to Phase Out Cybertruck for Robotaxi Focus

On Friday, Elon Musk announced via X that Tesla (TSLA) is set to end Cybertruck production at Gigafactory Texas around mid-2027. The factory space will be redirected to the Cybercab, a two-seat robotaxi already under federal review.

For TSLA shareholders, whether this change proves beneficial depends on a vehicle Tesla has yet to sell to the public. The stock had already dropped 11% on Thursday, before Musk's post.

Why is Cybercab under federal review?

The Cybertruck has faced multiple recalls and price adjustments. A different challenge awaits the Cybercab.

Tesla started charging for rides in Austin on Sept. 3, when the Cybercab launched. Within hours, the National Highway Traffic Safety Administration (NHTSA) launched an audit, according to Electrek.

Tesla will be winding down production of the Cybertruck at Gigafactory Texas around the middle of next year to make room for increased Cybercab production

— Elon Musk (@elonmusk) November 6, 2026

The vehicle lacks a permanently attached steering wheel, pedals, and mirrors. Tesla certified compliance with all relevant federal safety standards without seeking an exemption, per the report.

On Sept. 10, NHTSA stepped up its action with a Special Order, a formal legal demand for sworn responses. Incomplete replies could lead to fines of up to $139 million, the report added.

Will ending Cybertruck production benefit TSLA?

Tesla's investor deck lists installed Texas capacity exceeding 125,000 vehicles annually for both Cybertruck and Cybercab. However, installed capacity does not necessarily translate to actual production.

In the third quarter, deliveries of Tesla's other models — including Cybertruck, Semi, Model S, and Model X — fell 48% year over year to 8,295, Electrek reported.

Operating income declined 56% to $718 million, while research and development spending surged 69%, according to Electrek. This followed a second-quarter profit shortfall.

Musk stated on the earnings call that most Cybercabs will be owned by Tesla and offered as a ride-hailing service, CNBC reported. Yet that structure could delay returns, as revenue would come per ride rather than from a sale.

TSLA fell 11% on Thursday, a drop Bloomberg linked to a post-midterm selloff in Musk-linked companies. Shares have fallen roughly 24% year-to-date.

Third-quarter automotive revenue slipped 3% to $20.56 billion, CNBC noted. Consequently, the shift ties more of Tesla's valuation to autonomy rather than vehicle sales. The strategy could falter if NHTSA restricts Cybercab deployment or if production volumes fall short.