The News
Tesla on Friday unveiled Cybercab, its self-driving robotaxi, as the electric carmaker hopes to diversify its business amid stagnating EV sales, with plans to build a network of autonomous cabs to compete with ride-hailing giant Uber.
The Cybercab will have no steering wheel or pedals, and will use inductive charging, a type of wireless power transfer, rather than a conventional plug, Tesla CEO Elon Musk said at the launch event in California. It will cost under $30,000 and be in production before 2027, he said.
The company also unveiled a self-driving “robovan” capable of carrying up to 20 passengers at a time and transporting goods, though no details were given about its cost or production time frame.
“It’s going to be a glorious future,” Musk said. “With autonomy, you get your time back. It’ll save lives, a lot of lives, and prevent injuries.”
But accidents related to Tesla’s self-driving software, and competition from giants such as Uber who hold a significant head start in the robotaxi sector, have led to suggestions that Musk may struggle to make inroads in the market.
SIGNALS
Uber has a 14-year head start in ride-hailing
Tesla’s major challenge will be competing with Uber in “replicating a ride-hailing network with a 14-year head start,” according to The Wall Street Journal. While Uber’s stock took a hit when Musk first announced Tesla plans for self driving cabs, the ride-hailing giant quickly signed deals with robotaxi providers like Waymo and Cruise — whose business model relies on a steady stream of passengers. Still, autonomous vehicle hardware and software is expensive: one analyst predicted it would take about 10 years for Waymo — the largest active robotaxi network, which surpassed 100,000 paid weekly trips in August, according to the Journal — to reach payback on invested capital. Musk’s taxi would likely face similar hurdles. “Is Tesla ready to stomach that?” the newspaper asked.
Tesla is seeking to compensate for stagnant EV sales
Tesla’s sales have stagnated: Even if it delivers a further 499,000 vehicles in the final quarter, annual sales would still be below total 2023 levels, according to Bloomberg columnist Liam Denning. Revenue is down because Tesla is now producing more vehicles than it is selling, and has been forced to slash prices amid increased competition from both Chinese and American EV-makers. These daunting business prospects mean Musk will likely “lean even harder into the narrative of self-driving vehicles, artificial intelligence and robots” at the robotaxi launch, since he needs to “justify the dissonance” of Tesla’s currently overvalued stock price.
Drivers report Tesla cars’ autonomous features have serious issues
Several Uber and Lyft drivers currently use Tesla’s autonomous driving features, but many told Reuters of “critical shortcomings” with the technology, such as sudden unexplained acceleration and braking. Reuters spoke to one Las Vegas driver who was using the software when it failed to detect a car in its blindspot, forcing the driver to take control and mitigate the impact of the accident. Trade publication InsideEVs wrote that Ubers using Tesla’s self-driving feature are “basically Temu-Grade robotaxis” — a reference to the Chinese online platform known for selling cheap products of at-times questionable quality — saying “I wouldn’t trust my life to one.”