NEW YORK (AP) – In 2019, Elon Musk asserted that driverless Tesla “Robotaxis” would hit the roads “next year,” but that promise didn’t materialize. The following year, he made the same claim again, yet it remained unfulfilled.
Regardless of past failures, the promises kept resurfacing. In January of last year, Musk stated, “Next year, there will surely be over a million Robotaxis.”
Will 10 or 12 suffice?
Musk seems to be nearing the realization of his Robotaxi vision with a test run of a small fleet of self-driving taxis in Austin, Texas, which commenced on Sunday. If the Austin trial proves successful, it may enable the billionaires to broaden their services this year, although reaching one million might take longer than anticipated.
There hasn’t been significant interest or challenges.
While Musk made his “next year” claims, competitor Waymo was actively launching driverless taxis in cities like Los Angeles, San Diego, and Austin, racking up 10 million paid rides.
Boycotts have negatively impacted Tesla’s sales amid mask-related politics. Competing electric car manufacturers have gained market share with their new models. Investors have suffered a $150 billion stock loss due to Musk’s confrontations on social media and with federal vehicle regulators overseeing Robotaxi deployment. The stock saw a slight recovery after Musk expressed regret over some of his remarks.
Tesla shareholders have remained loyal to Musk, ignoring naysayers while hoping for the success of an independent electric car company (and profiting significantly along the way). A decade ago, Tesla stocks were trading at about $18, closing at $322 last Friday. By Monday noon, the stock surged 10% as investors reacted positively to the deployment news.
Musk appeared joyful on Sunday morning, sharing on X that @tesla_ai The Robotaxi launch kicks off this afternoon in Austin, with fares set at a flat $4.20!
The testing phase has begun cautiously. Tesla is monitoring the vehicles remotely and has placed staff in the passenger seats for safety. The number of Teslas in operation is limited (only 10 or 12 vehicles), and they are restricted to a defined Geofenced area.
Musk insists that the service will soon expand to other cities, with aspirations of reaching hundreds of thousands, if not one million, within the next year.
However, some market observers are skeptical.
“How quickly can he grow his fleet?” questions Garrett Nelson, a CFRA analyst. “We’re likely looking at dozens of vehicles initially, which is quite small.”
Morningstar’s Seth Goldstein labels Musk’s predictions as classic hyperbole.
“If anyone in Austin can download the app and utilize Robotaks, it would be a success, but I doubt that will happen until 2028,” he suggests. “The testing phase will take considerable time.”
The pattern of Musk inflating stock prices with grandiose claims is well-known among investors.
In 2018, he told Tesla shareholders he was prepared to buy out all stocks at a hefty premium to take the company private. However, he failed to secure written commitments from financial entities; the Federal Stock Regulatory Authority fined him for not disclosing loan amounts or other significant details.
More recently, Musk mentioned to CNBC that Tesla was experiencing a “major rebound” in demand. Shortly after, the European Auto Trade Group reported a 50% plunge in sales.
Musk has faced criticism for overstating the capabilities of Tesla’s self-driving system, starting with its name. “Fully automated driving” is somewhat misleading as the system requires drivers to remain alert and ready to take control.
Federal Highway Safety Regulators initiated an investigation into FSD last year following several incidents, and the Department of Justice has also conducted its own investigation, although its status remains unclear. Tesla is also battling lawsuits regarding this feature, some of which have been settled, while others are dismissed. In one case, the judge ruled in favor of the defendants, citing a lack of evidence for “willfully” misleading statements.
Musk claims that Robotaxis will operate with an enhanced fully automated system, ensuring greater safety.
He further asserts that the service can scale quickly nationwide. His secret weapon: the millions of Tesla owners already on the roads. He envisions software updates that could convert personal vehicles into driverless taxis, allowing owners to earn income while parked for extended periods.
“Instead of having your car idle, it could generate revenue,” Musk remarked earlier this year, likening it to an Airbnb model for vehicles. “You can constantly adjust the size of your fleet.”
Musk argues that Tesla will deploy taxis more efficiently compared to Waymo, which has invested in expensive laser and radar systems, while Tesla relies solely on cameras for navigation.
“Tesla will have it, I don’t know,” Musk pondered during an investor call, mentioning absurd goals like 99% market share. Waymo’s first-mover advantage and potential competition from Amazon may ultimately dominate the driverless market.
Nonetheless, Dan Ives, an analyst at Wedbush Securities and a strong supporter of Musk, expressed optimism that this time Musk might truly deliver, thanks to Tesla’s capability for rapid scaling.
Ives shared his positive experience after multiple rides in the Tesla Robotaxi on Sunday.
“We encountered instances where the cars navigated through oncoming traffic and maneuvered around obstacles, demonstrating versatility and responsiveness,” he noted.
Even skeptics like Goldstein from Morningstar acknowledge that Musk has been right before.
He revolutionized the auto industry by making consumers eager to purchase expensive electric vehicles, extended internet access to rural regions via his Starlink satellite service, and recently achieved a successful unmanned SpaceX rocket landing back on Earth.
“Perhaps his timelines aren’t fully realistic,” Goldstein reflects. “But he has the capability to innovate future technological advancements.”
Source: apnews.com