Musk’s AI ambitions approach make-or-break moment with Tesla Robotaxi reveal
Summary
The electric-car maker also is expected to detail plans for an Uber-style ride-hailing service.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, the world is expected to finally get a look at what exactly he has in mind.
Tesla is expected to unveil its first driverless car, along with details on a forthcoming robotaxi service that would put it in direct competition with Alphabet’s Waymo, a self-driving car venture launched more than a decade ago.
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 event is scheduled for 7 p.m. Pacific time at the Warner Bros. studios in Burbank, Calif.
“This will be one for the history books," he posted on X last month. He also has indicated that the company could provide a timeline for the introduction of lower-cost models, after delaying plans for a long-promised $25,000 car.
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 are running high among analysts and investors that he will show off a functioning autonomous vehicle and lay out specific plans for its launch, including the timing. They anticipate he will offer more details on a ride-hailing service that is expected to use the Tesla-built robotaxi.
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 Issaacson’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 pick-up locations.
Despite Wall Street’s excitement, some analysts remain cautious, noting that the CEO has a pattern of overpromising and under-delivering, 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 teased the idea of a robotaxi as early as 2016, 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 ambitions face technological and regulatory hurdles. While some states have taken a hands-off approach to regulating driverless cars, the rules remain patchwork, and some governments have cracked down on their operation in recent years.
Last year, General Motors’ driverless-car operation Cruise was temporarily shut down, after a single accident led to it losing its permit in California. The Detroit automaker has since put its autonomous cars back on the road in some cities with safety staff behind the wheel to monitor.
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.
Where Tesla deploys its robotaxis remains an open question. 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.