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Tesla's Musk unveils robot taxis to fanfare and skepticism

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Tesla's Musk unveils robot taxis to fanfare and skepticism

Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of X, looks on during the Milken Conference 2024 Global Conference Sessions at the Beverly Hilton in Beverly Hills, California, USA, May 6, 2024. File photo

(1/2)Elon Musk, Chief Executive Officer of SpaceX and Tesla and owner of rightopens new tab
  • Musk is expected to unveil the robotaxi prototype and ride-hailing app
  • Investors are looking for a robotaxi production schedule and a business plan
  • Advances in humanoid robots and cheaper versions of their electric vehicles are expected
Oct 10 (Reuters) – Tesla (TSLA.O)opens new tab will unveil its long-promised robotaxi late Thursday in Hollywood and brief investors on artificial intelligence projects. These efforts, CEO Elon Musk hopes, will fuel the electric vehicle maker's long-term growth.

Excitement for the event was evident on social media, with screenshots of invitations and speculation about what might be announced. But investors and analysts have pointed to challenges with the technology and tempered their expectations.

Musk's plan is to operate a fleet of self-driving Tesla taxis called Cybercabs that can hail passengers via an app. Individual Tesla owners can also earn money with the app by registering their vehicles as robotaxis.

Thursday's event at Warner Bros. studios near Los Angeles, California, is titled “We, Robot” – an apparent reference to American writer Isaac Asimov's science fiction short stories “I, Robot.” but also echoes Musk's insistence that Tesla “should be viewed as an AI robotics company” rather than an automaker.
Participants include investors, stock analysts and Tesla fans. At the top of their list of questions will be: How quickly can Tesla ramp up robotaxi production, at what cost and, most importantly, how much money it can make from the taxi business?

An eye will also be on the progress the company has made with partial automation software, which it markets as “Full Self-Driving,” and which the company's observers expect to be the basis for its robotic axes.

Musk could also provide details on cheaper versions of Tesla's current electric vehicles, as well as updates on his humanoid robot Optimus.

MISSED PROMISES

Musk said in 2019 that he was “very confident” that the company would have operational robotaxis by next year. After missing promises, Musk shifted his focus to vehicle development this year after scrapping plans to build a smaller, cheaper car that was widely seen as essential to counter slowing demand for electric vehicles.

Tesla is at risk of experiencing its first decline in deliveries this year as purchase incentives have failed to attract enough customers to its aging range of electric vehicles. Drastic price cuts, which were intended to compensate for the high interest rates, also reduced profit margins.

To convince investors that Tesla can maintain the rapid growth rate it reported a few quarters ago, analysts say Musk will need to show off a prototype and provide detailed plans for how Tesla can overtake rivals like Alphabet (gogetL.o).opens new tab Waymo, which operates unmanned robot taxis that carry paying passengers in some U.S. cities.

Complicated technology and strict regulation have resulted in billions of dollars in losses for other companies trying to corner the robotaxi market, forcing some to close shop.

Some are still pushing for it, including General Motors (GM.N)opens new tab Cruise, Amazon (AMZN.O)opens new tab Zoox and Chinese companies like WeRide.

Unlike expensive hardware like lidar that others use, Musk relies only on cameras and AI to run FSD to keep costs down. But FSD, which requires constant driver attention, has faced regulatory and legal scrutiny with at least two fatal crashes involving the technology.

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Reporting by Abhirup Roy in San Francisco and Akash Sriram in Bengaluru; Editing by Sayantani Ghosh and Chris Cushing

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Akash reports on technology companies in the US, electric vehicle manufacturers and the space industry. His reporting typically appears in the Auto & Transportation and Technology sections. He holds a postgraduate degree in Conflict, Development and Security from the University of Leeds. Akash's interests include music, football and Formula 1.

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