[Spotlight] Tesla (TSLA): New Flying Roadster Unveiled, Stock Drops 2% at Close After Initial 5% Gain—Can the “Dream” Sustain the Stock Price Until 2028?
Tesla unveiled its new Roadster on October 15 (US time), shaking the market. Footage of the car driving on a wall while upside down and performing a backflip in mid-air spread across social media worldwide immediately after the reveal. CEO Elon Musk declared, “The flying car has become a reality,” and the stock price rose by about 5% in pre-market trading on the 16th. However, the closing price for regular trading settled about 2% lower than the previous day. Despite the flashy demo, why couldn’t the stock price maintain its gains? The essence of this news lies not in the car’s performance itself, but in whether the market is looking at the “dream” or the “earnings.” This article organizes the announcement details, the technical mechanisms, the stock price movements, and the points to watch next.
An unusual presentation held at the SpaceX facility in Texas
The presentation was held at the SpaceX testing facility in McGregor, Texas. It is highly unusual for an automaker’s new car launch to take place at a rocket development site. Enthusiastic Tesla fans gathered at the venue, and the reveal was live-streamed on Tesla’s X account.
The production was thorough. The Roadster drove up a massive, steeply curved ramp, remaining stuck to the surface even while upside down. It then launched off the edge of the ramp, performed a backflip in mid-air, and landed on its wheels. It also showcased a scene where it jumped over a lineup of the Cybercab, Cybertruck, Semi, Model Y, and Model 3. After the announcement, Musk posted on X to the effect that “the future had flying cars.”
It is worth noting that the demo vehicle was unmanned. Musk explained this was “so that no one would die.” As he had teased before the announcement that it would be “the most exciting demo in history, regardless of whether it succeeds,” this was both a sales promotion event and a showcase of technology. Production is scheduled to begin in 2028, but the price has not been announced.
Technology behind the demo: Suction fans and cold gas thrusters
So, how was that movement achieved? There are two keys.
The first is the “multi-mode fan and ground sealing system” on the underside of the car. It uses fans to suck out the air beneath the vehicle, pressing the car against the road surface. Normal sports cars rely on wings or body shape to generate downforce from airflow, which is ineffective when stopped. Because the Roadster uses fans, it can generate strong suction even while stationary. Tesla explains that it can produce force equivalent to up to 2G, stating, “It can hold the vehicle upside down even while stopped.” It was thanks to this device that it could drive on the ramp while upside down.
The second is the cold gas thrusters, which apply SpaceX technology. According to Musk, the car is equipped with about 10 nozzles and an ultra-high-pressure air tank. This method does not use combustion but instead forcefully ejects compressed air to obtain thrust and attitude control. The main thruster at the rear provides rapid acceleration, while the surrounding thrusters control ascent and rotation. Since it does not burn fuel like a rocket, it is more accurate to describe it as a “car with compressed air jets” rather than a “car with a rocket” at the presentation.
Acceleration from a standstill to about 100 km/h is said to be under one second. In the demo, a figure of around 0.81 seconds was shown with thruster assistance. This far exceeds the common sense of mass-produced supercars.
Will the “flying car” really fly? Organizing the three grades
Let’s clarify this calmly. The “flying” referred to here is not a vehicle that moves freely through the sky like a bird. It means it can lift off the ground or perform somersaults for a short time.
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The Roadster will be available in three configurations. The base model is the “Performance,” which features active aerodynamics and a suction system. Above that is the “Thrust,” which Tesla positions as “race-ready.” This model features cold gas thrusters at the rear, with a 0-60 mph acceleration of under one second. The top-tier model is the “Rocket.” It is a single-seater, a specification Tesla describes as “flight-ready.” It is said to have thrusters arranged around the body, enabling movement not only forward but also upward, sideways, and rotationally. Figures of over 230 mph (approx. 370 km/h) for top speed and under 0.59 seconds for 0-60 mph have been cited.
However, the Rocket is by invitation only, and there is no reservation fee displayed. Tesla’s official website also notes that it has not been approved for road use. Musk himself has admitted that it may not be legal in all regions. In other words, the future that many imagine of “buying a flying car to commute” was not shown in this announcement. This is one of the reasons why the stock price could not maintain its gains.
A new model nine years in the making: What has changed since the 2017 version?
The Roadster was first unveiled in 2017. At the time, delivery was scheduled for 2020, but nine years have passed with repeated delays. At this year’s shareholders’ meeting, it was teased for an April 1st reveal, and the schedule shifted after that as well. There were reports of a delay in the announcement at the end of September, and it finally reached the reveal on October 15.
Compared to the 2017 version, many things have changed in terms of numbers. While acceleration has been significantly shortened, the cruising range has been cut roughly in half to over 300 miles (approx. 480 km), and the top speed has also decreased. The seating has changed from a four-seater to a maximum of two. It is clear that the focus of the concept has shifted from a “long-range luxury EV” to an “iconic car that shows overwhelming acceleration and performance.”
The reservation fee for the Performance model in the US is $50,000 ($5,000 on the day, $45,000 within 10 days). A figure of $250,000 has been reported for the Thrust. The final vehicle price has not been announced. Musk positioned this car as “the last masterpiece of a human-driven car,” stating that it will be Tesla’s only manual-driving car in the future. The Roadster is not a product meant for high-volume sales. It is designed as a halo car to elevate the brand.
Stock price movement: Started 5% higher, ended 2% lower
This is the most important part for investors.
Let’s look at the flow leading up to the announcement. Tesla stock continued to fall from its October 9 closing price of $382.70, and the closing price on the 15th was around $362.44. This was a decline of about 5%, meaning it entered the announcement after four consecutive days of losses. The entire market was unstable that same week. Concerns about interest rate hikes intensified following inflation indicators that exceeded expectations, and tech stocks were being sold off due to concerns about AI investment.
After the announcement, the stock price surged in after-hours trading. Before trading on the 16th, it rose to the $381 level, up about 5%, which means the market capitalization increased by about $57 billion overnight. For a company currently worth about $1.4 trillion, it added the value of a large company in just a few hours.
However, the momentum did not continue once regular trading began. Although it rose by over 2% at one point, selling pressure became dominant afterward, and the closing price was $354.72, down about 2% from the previous day. Trading volume was about 61.6 million shares, which is about 20% higher than the daily average of about 50.8 million shares. Many investors reacted and traded, but the final structure was that selling outweighed buying. Year-to-date, it remains down by about 17%.
Why didn’t it “fly”? Three honest signals from the stock price
I believe there were three reasons for the market’s reaction.
The first is the distance to profitability. Production begins in 2028, and the price is undecided. Musk himself made comments to the effect that he does not know whether this car will significantly move revenue. As a halo car, while brand effects can be expected in a few years, it will not directly contribute to profits for this term or the next.
The second is the content of the “flying” capability. The Rocket, which has flight functions, is by invitation only and is not a mass-production grade for the general public. It is also not approved for road use. The demo was unmanned and involved a short-duration somersault. It is difficult to interpret this as the “practical application of a flying car.” The reason buying did not continue in regular trading is likely because this sober view spread.
The third is that expectations were already priced in before the announcement. True to the market adage “buy the rumor, sell the fact,” the material was exhausted once the demo succeeded. Furthermore, the poor macro environment suppressed the upside. In a week where concerns about interest rate hikes and anxiety over AI-related stocks continued, it is not easy to keep pushing the stock price up with individual topics alone.
Is the real protagonist the speculation of a “Tesla x SpaceX merger”?
With this announcement, there is a point that the market reacted to more than the car itself. That is the merger of Tesla and SpaceX.
After the announcement, this topic spread rapidly among analysts. Dan Ives of Wedbush Securities commented that the Roadster event “brought the relationship between Tesla and SpaceX to the surface in a concrete way.” This is because the propulsion devices, pressure vessels, and control hardware mounted on the car body are the very technology of SpaceX. Also, a Barclays analyst touched on the possibility of a merger proposal appearing before Tesla’s annual shareholders’ meeting (which must be held by December 6). The firm estimated a full stock-for-stock exchange where SpaceX would be the buyer, with Tesla shareholders receiving SpaceX stock at a premium. This is based on the premise that SpaceX is worth about $2.1 trillion and Tesla about $1.5 trillion. It was also reported that on prediction markets, the probability of a merger being realized by early 2027 exceeded 50%.
What is important here is that these are still at the speculation stage. Neither Tesla nor SpaceX has officially announced a merger. Veteran analyst Gene Munster views the commercial value of the Roadster itself as small, but sees it as “a display of technical prowess and material that hints at a merger.” On the other hand, other analysts have shown a cautious stance toward investors who are too expectant of a merger. Will it support the stock price, or will it be a source of uncertainty? Evaluations are divided on this.
Next week’s biggest event: Q3 earnings on October 21
After the excitement surrounding the Roadster, the reality of financial results awaits. Tesla is scheduled to announce its third-quarter earnings on October 21, U.S. time.
The backdrop is one of tough numbers. While revenue for the April-June quarter grew 26% year-on-year, operating profit fell 57%, and the operating margin was a mere 1.4%. Increased research and development costs, stock option-related expenses, and lower average selling prices were burdens. Furthermore, capital expenditure for 2026 is planned to swell to approximately $25 billion, roughly double that of the previous year. Rising depreciation costs will squeeze profits moving forward. With a P/E ratio exceeding 300, Tesla is a stock that is easily sold off the moment growth expectations crumble.
The analyst consensus rating is “Hold,” with an average target price in the low $400s. The current stock price is slightly below that level. What the market will be watching in the earnings report is the gross margin, free cash flow, and progress on the Robotaxi and FSD. While the Roadster talk reinforced the “dream” aspect, if the earnings numbers are poor, the valuation of that dream could plummet. Conversely, if improvements in profit margins or the expansion of the Robotaxi are demonstrated, this recent buzz could act as a tailwind for buying.
Divergent Expert Views: Should It Be Viewed as Brand Strategy?
How one evaluates the Roadster depends clearly on their perspective.
Proponents emphasize its value as a symbol of technological prowess. The view is that Tesla is less of an electric vehicle manufacturer and more of a technology company spanning AI, robotics, energy, and space, and that this announcement was a success in conveying that worldview through a single video. One investor present at the event noted that it exceeded expectations, which were already extremely high. NASA Administrator Bill Nelson also praised it as a “cool way” to introduce the Roadster to the world. Related topics also ranked on China’s social media platform Weibo, making it a global sensation.
Skeptics question its feasibility and profitability. Their position is that the next major revenue source after electrification is not a sports car, but the Robotaxi, FSD, and Optimus. Also, one cannot overlook the history of launch dates provided by Mr. Musk being delayed by years. The Roadster itself changed from a 2020 target to a 2028 goal. The CEO of XPeng also praised the demo as “very cool” while pointing out that certification for flight capabilities will be a challenge.
In short, the reception of this announcement changes depending on what you use as your evaluation metric. If viewed as a technology show, it is near perfect. If viewed as a business in terms of profitability, it is not yet at a stage where it can be evaluated.
5 Points Investors Should Check Moving Forward
Finally, let’s summarize the points to watch in the future.
The first is the earnings report on October 21. In particular, the movements in gross margin and free cash flow will determine the direction of the stock price.
The second is follow-up reports on the integration news. Will there be an official announcement regarding Tesla and SpaceX, and if so, what will the conditions be? The shareholder meeting to be held by December 6 will be a milestone.
The third is the details of the Roadster’s price and specifications. Once the price is announced, it will be easier to forecast brand value and profitability.
The fourth is progress on the regulatory front. What kind of certification will flight-capable specifications like the Rocket receive, and how will they be treated on public roads? This will likely be a multi-year story.
The fifth is the overall market environment. If concerns about interest rate hikes and AI-related stocks persist, even individual positive news will be difficult to reflect in the stock price.
Summary: The Dream Was Bought, But the Judgment of Reality Is Yet to Come
This Roadster announcement demonstrated that Tesla still possesses the “power to show a dream.” The flashy demo captured the world’s attention, and the stock price jumped significantly at one point. However, as the decline in the closing price indicates, the market is not in a phase where it will continue to push up the stock price on dreams alone. There is the reality that production is in 2028, the price is undecided, and the flight specification is by invitation only.
On the other hand, the significance of this announcement goes beyond the car itself. By visualizing the technical connection with SpaceX, the major theme of integration has become more realistic. What should be evaluated is not whether the Roadster will be profitable on its own, but whether it has shown the next form of the company known as Tesla.
Tesla stock will continue to move in a tug-of-war between dreams and reality. Next week’s earnings will be the first litmus test to predict which way that tug-of-war will tilt. Can they talk about dreams while generating solid profits from their core business? Investors need to calmly assess that.