What's Tesla's plan?
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Tesla CEO Elon Musk says the automaker's self-driving technology will be good enough by next year to launch a long-awaited robotaxi service, but there are serious questions about the technology's readiness and how such a business would operate.
Why it matters: With Tesla's electric vehicle profits shrinking, Musk is now betting the company on an autonomous future involving both vehicles and humanoid robots.
- 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.
- "ARK Invest thinks on the order of $5 trillion; I think they are probably not wrong," Musk told investors Tuesday, referring to an investment firm's particularly bullish predictions.
Yes, but: Tesla is worth $700 billion today.
- Even Uber, whose ubiquitous ride-hailing network operates in 70 countries, is worth just $140 billion.
Driving the news: 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."
The big picture: 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."
Reality check: 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.
- 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."
Zoom in: 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.
- But Musk dodged 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.
- "It would even work on a different Earth," said Musk, whose interplanetary ambitions are well known.
Between the lines: Besides the remaining technical challenges, there are still a slew of unanswered questions about how Tesla would turn its customers into business partners in a robotaxi service.
- Who would be liable in case of an accident or theft?
- How will owners' and riders' privacy and safety be protected?
- How will Tesla ensure that owners' cars are clean and properly maintained, or that they're sufficiently charged to get riders to their destination?
The bottom line: Given all the complexities of autonomous driving, Tesla is likely to commercialize its Optimus robots far sooner than its robotaxi service.
