Peter Lyon
July 26, 2024
As Tesla’s EV sales stagnate and profits fall, company CEO Elon Musk is looking at the next big thing. And according to the controversial boss, that is marrying Tesla’s electric car achievements with the latest in self-driving technology.
By that, Musk is referring to the brand’s long-awaited robotaxi service and humanoid robots. However, there are serious questions about the readiness of technology and how such a business would operate.
Impatient investors want details. But so far, Musk isn’t providing much information aside from vague promises that Tesla’s value will soar when its robotaxis materialize. And to put investor’s nerves further on edge, Musk recently announced that the Tesla Robotaxi unveiling event has been pushed back from August 8 to October 10, 2024.
“ARK Invest thinks on the order of $5 trillion; I think they are probably not wrong,” Musk told investors this week, referring to an investment firm’s particularly bullish predictions.
Tesla is worth $700 billion today, while Uber, whose ride-hailing network operates in 70 countries, is worth just $140 billion.
During a call to discuss Tesla’s disappointing second-quarter results, analysts pressed Musk on what to expect ahead of an Oct. 10 robotaxi introduction, which was originally planned for August.
“Obviously, my predictions on this have been overly optimistic in the past,” Musk said, adding that he thinks “unsupervised full self-driving” — key for robotaxi operation — could be ready by the end of this year. “I’d be shocked if we cannot do it next year.”
Musk envisions turning Tesla’s existing customer-owned fleet into a commercial robotaxi network like “Airbnb on wheels,” he said.
When Tesla owners aren’t using their cars, the thinking goes, they can send them out to pick up riders 50 to 60 hours a week, sharing a portion of the fares with Tesla.
Asked how long it will take to scale a ride-hailing service, Musk said: “We will have a fleet that’s on the order of 7 million vehicles soon. This is basically instant scale with a software update.”
Currently, Tesla only has about 2.2 million vehicles on U.S. roads, and virtually all of them would require updated computers and cameras to enable full autonomy. So what Musk is suggesting is a big ask. And extremely ambitious, as always.
Plus, Airbnb on wheels already exists through peer-to-peer rental companies like Turo. Yet only a tiny fraction of car owners choose to list their cars for rent on the Turo platform.
Musk thinks the numbers will be much higher on a prospective Tesla robotaxi network. “The entire Tesla fleet basically becomes active. Maybe there’s some number of people who don’t want their car to make money. But I think most people will.”
A separate fleet of Tesla-owned cars will also be part of the network, Musk said — presumably the robotaxi that has yet to be unveiled.
CARLIST THOUGHTS
Musk still needs to answer specific product-related questions, including whether its robotaxi design will need a regulatory waiver to operate without a steering wheel or pedals. Rather than the city-by-city strategy that rivals Waymo, Zoox and Cruise are pursuing, Tesla is working on a “generalized solution” that would allow its robotaxis to drive anywhere. And besides the remaining technical challenges, unanswered questions include — who would be liable in case of an accident or theft, and how will owners’ and riders’ privacy and safety be protected? Early days, folks.
