Musk Shows Off Driverless Robotaxi

"Tesla Chief Executive Elon Musk has for years teased plans for a fully autonomous robotaxi that can shuttle paying customers around town.

On Thursday night, he finally showed the world what he had in mind, unveiling two new vehicles: an almond-shaped Cybercab with no steering wheel or pedals, and a Robovan, which can transport as many as 20 people at a time or move cargo.

Musk said the Cybercab, a two-seater driverless car that is designed to operate as a robotaxi, could cost less than $30,000, and customers would be able to buy one. He also described a future where people who drive for Uber and Lyft would one day oversee a "flock" of Cybercabs that they care for like a "shepherd."

At the Warner Bros. studios in Burbank, Calif., Musk made a splashy debut, first appearing in a black leather jacket accompanied by a person wearing a SpaceX astronaut suit. He then got into the passenger side of what he described as the Cybercab, a robotaxi that drove him across the dark studio lot and dropped Musk off near the stage, where he began his presentation.

Tesla plans to deploy a fully autonomous version of its "Full Self-Driving" software, a feature that now needs driver supervision, in Texas and California next year.

Musk added that Tesla plans to start producing the Cybercab before 2027.

"I tend to be optimistic with time frames," he said.

Musk has described the reveal as the company's most significant moment since the rollout of the mass-market Model 3 sedan in 2017.

The billionaire entrepreneur is betting the company's future on a pivot to robotics and artificial intelligence, a shift that comes as Tesla's profitability has slipped and broader consumer interest in electric cars has cooled within the past couple of years.

Musk has said such technologies could help boost Tesla's market value to as much as $30 trillion, nearly 40 times its current worth.

Expectations were running high among analysts and investors that he would show off a functioning autonomous vehicle and lay out specific plans for its launch, including the timing.

Tesla's stock has rallied ahead of the presentation with shares up 52% since Musk announced it in early April. Tesla originally scheduled the event for Aug. 8 but delayed it after Musk asked for design changes on the vehicle.

Musk has referred to as the robotaxi as the Cybercab. An early sketch, published in Walter Isaacson's biography of Musk, shows an almond-shaped, two-seater vehicle with no steering wheel or pedals, and doors that lift up toward the front.

In April, Tesla showed investors its concept for an Uber-like ride-hailing app that riders summon driverless vehicles to pickup locations.

Despite Wall Street's excitement, some analysts were cautious leading up to the event, noting that the CEO has a pattern of overpromising and underdelivering, particularly when it comes to autonomous vehicles.

"We believe the Robotaxi event will be long on vision, and short on immediate deliverables or incremental revenue drivers," said Bernstein analyst Toni Sacconaghi.

Tesla first floated the idea of a robotaxi last decade with Musk describing a shared fleet of autonomous Teslas that owners could lease out to strangers for extra income. In the years that followed, he said every Tesla sold since late 2016 has the hardware to function as a robotaxi, implying that once the software catches up, most Tesla drivers would be able to participate in the program.

His plans will continue to face technological and regulatory hurdles. While some states have taken a hands-off approach to regulating driverless cars, the rules remain a patchwork, and some governments have cracked down on their operation in recent years.

Tesla also needs to make leaps in advancing its own driver-assist software, which today is considered a "level 2" system. Its most advanced version -- a feature Tesla refers to as "Full Self-Driving (Supervised)" -- requires the driver to remain alert and ready to take over, and it doesn't make the cars autonomous.

By contrast, Waymo has achieved "level 4" autonomy on its cars, which means it can operate them without a human driver in most circumstances.

Waymo, the market leader in the technology, has fleets circulating within limited areas in San Francisco, Los Angeles, Phoenix and Austin, Texas.

Musk has assigned priority on development of a robotaxi over a more affordable electric car, a move that has surprised and unnerved some investors.

Some analysts see robotaxis as a huge growth opportunity for Tesla. Deutsche Bank estimated such a venture could bring Tesla an additional $4 billion in sales and another $1 billion in pretax earnings by 2030. RBC pegged the total global revenue opportunity for robotaxis at $1.7 trillion by 2040. "If somebody doesn't believe Tesla is going to solve autonomy, I think they should not be an investor in the company," Musk told investors in April." [1]

1. Musk Shows Off Driverless Robotaxi. Peterson, Becky.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 Oct 2024: B.1.