As I’ve written about for some time now, all of these have been premature promises, where the media and investors have rewarded him and companies far ahead of the technical and business realities of the stated aspirations.
The trend continued this weekend with the highly anticipated, controlled launch of a curated ‘robotaxi’ test in Austin, complete with a supervising Tesla rep in the front passenger seat. It was launched Sunday to a pre-selected crowd of Tesla fans, many of them online influencers.
”Tesla’s robotaxi service, touted by Elon Musk as the future of his flagging electric-car maker, launched in the company’s home city of Austin on Sunday with about 10 vehicles and a human safety driver on board amid regulatory scrutiny of its self-driving technology.”
“Shares in Tesla have risen about 50 per cent from this year’s low in early April, with investors hopeful the autonomous ride-hailing service will help revive a company that has suffered declining sales and a consumer backlash against Musk’s political activism. Despite the hype surrounding Tesla’s robotaxi, the launch — with a company employee seated in the passenger side for safety while leaving the driver’s seat empty — was low-key and the initial service was open only to a select group of social media influencers. Shortly before the launch, Musk said on social media that the robotaxi service would begin “with customers paying a $4.20 flat fee”.
“According to Musk, who has stepped back from his US government role to focus on the electric-car maker and the robotaxi, the self-driving Tesla Model Y vehicles will only operate in limited areas, avoid challenging intersections and have teleoperators who can intervene if problems arise. The limited launch comes as the National Highway Traffic Safety Administration continues to carry out multiple investigations into Musk’s claims about the capabilities of Tesla’s autopilot and “full self-driving” systems. Despite its name, the full self-driving system still requires humans to sit in the driver’s seat and pay full attention — unlike Google’s Waymo taxis.”
“The NHTSA wrote a letter in early May seeking additional information about technologies that would be used in Tesla’s robotaxi service. The regulator said it had received Tesla’s response and was reviewing its content. Musk said in a social media post this month that the company was being “super paranoid” about safety. But he has also claimed there would be 1,000 robotaxis “in a few months”, and that the service would expand to cities such as San Francisco and Los Angeles.”
“On Sunday, Tesla opened a new website for the public to sign up to get updates on the robotaxis, which can be hailed via an app. It is unclear how fast Tesla will be able to expand its service and catch up with Waymo, the only company with a fully public self-driving ride-hailing service in the US. Waymo rolled out its fleet in San Francisco three years ago. A group of Democratic lawmakers in Texas wrote to Tesla recently urging the company to delay its robotaxi launch until September when a new law on autonomous vehicles is due to be implemented. State governor Greg Abbott signed the rules — which require a state permit to operate self-driving vehicles — into law on Friday.”
Alphabet/Google’s Waymo for now is ahead in automated taxis vs Tesla’s robotaxis, with far more rides in more cities with cars equipped with more robust hardware and software. And Waymo just launched its robotaxi service to passengers in Atlanta in partnership with Uber. That’s in addition to Austin some time ago. But that gets far less media and market attention relative to Tesla, as Bloomberg points out. Despite superior metrics on key dimensions:
““People are underestimating Waymo in a pretty significant way, while overestimating Tesla,” said Samuel Rines, macro strategist at WisdomTree. Alphabet’s valuation “assigns basically zero value to Waymo even though it has the best tech, it is already operating, and it has deals with OEMs,” referring to original equipment manufacturers.”
(A Waymo autonomous taxi, left, and a vehicle Tesla is using for robotaxi testing purposes in Austin, Texas. Photographer: Eli Hartman/Bloomberg)
“Waymo says its vehicles have driven more than 71 million miles without a human operator as the ride-hailing service expands across the country, but Alphabet shares have lacked the kind of buzz benefiting Tesla Inc. — whose stock jumped 8.2% on Monday after rolling out a rival product in Austin over the weekend, with just a handful of vehicles and some hiccups.”
“Alphabet has long traded at a significant discount to Big Tech peers because of its reliance on digital advertising for the bulk of its revenue. However, at a little over 16 times estimated profits, its valuation is a fraction of Tesla’s at 150 times, a multiple based heavily on expectations for a service that investors had been waiting years for.”
Tesla has long skated by on far fewer sensors relying just on cameras, rather than Lidar, which offers far great ‘visibility’ via other, more expensive technologies. Lidar has long been derided by Musk.
“Tesla’s technology relies only on a set of cameras mounted on its vehicles, compared with the more expensive radar and lidar sensors used by Waymo and other rivals. Musk claims Tesla’s approach will allow it to expand the service more quickly and at cheaper prices. Tesla has said its Cybercab robotaxi, which has no steering wheel or pedals and was unveiled last year, will sell for less than $30,000. Rivals including Waymo and Amazon-owned Zoox use remote monitoring systems with support staff able to intervene and guide a vehicle that has ground to a halt because of an obstacle or accident.”
“Unlike Tesla, they do not have a safety driver in the vehicle. “Tesla has in no way demonstrated that its system is capable of the kind of accuracy and reliability that would be necessary for deployment in a range of driving conditions,” said Bryant Walker Smith, an associate professor at the University of South Carolina. Barclays analyst Dan Levy also cautioned there was still a huge amount of work to be done in building out the infrastructure to enable fully autonomous vehicles, saying “catching up to or surpassing Waymo will be no small feat”.
Additionally, Uber is partnering with Waymo and others to offer those vehicles as part of their service in many markets. Uber provides a whole host of services that standalone companies like Waymo and Tesla Robotaxis would have to otherwise build into their technology and services stacks.
Technology has always been ahead of their long-term aspirations in real life at scale. Automated self driving taxis are no different. Elon Musk’s Robotaxis need to be viewed in that frame thus far, in this AI Tech Wave. Stay tuned.
(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)
Strategy The Endowment Effect is sneaky. (safalniveshak.com) You may be less diversified than you think you are. (economist.com) AI How Meta ($META) plans...
