Tesla CEO Elon Musk unveiled the long-awaited Robotaxi, the cybercab, and a larger vehicle, Robovan, at the ‘We, Robot’ event at Warner Bros Studios in Burbank, California, on October 10.
It has made significant waves in the world of autonomous vehicles and has the potential to disrupt mobility with self-driving technology, eliminating the need for a steering wheel or pedals.
The company anticipates the Cybercab will begin production by 2026, giving Tesla time to refine its autonomous systems and navigate regulatory hurdles. Over the years, Tesla has intensively gathered data throughout San Francisco, Los Angeles, and the Bay Area, including specific destinations like the Tesla Diner in Hollywood.
Explicitly designed for Tesla’s upcoming autonomous ride-hailing network, the Robotaxi is expected to roll out for under $30,000, making it an affordable option in the EV market. Musk emphasised that the Cybercab is aimed at “individualised mass transit,” potentially enabling owners to manage fleets of these autonomous vehicles for ride-hailing services.
Tesla CEO Elon Musk speaks during the ‘We,Robot’ event.
Musk claimed that Tesla’s fully autonomous Cybercab could eventually reduce the cost of transportation to just 20 cents per mile, a significant reduction from the $1 per mile expenses associated with traditional ride-hailing services.
A decade of Elon Musk promising Tesla robotaxis
The Robotaxi appears to have come at the expense of Musk’s promised next-generation $25,000 EV. A few weeks after Musk announced the Robotaxi event, he slashed more than 10% of Tesla’s workforce and said the automaker was going “balls to the wall for autonomy.”
Though Musk had ambitious plans for its rollout and, in 2019, announced the company would have millions of robotaxis on the road by 2020, signalling a major shift toward autonomous mobility, the rollout has been marked by delays for both technical and regulatory reasons.
It further faced setbacks after driverless cars operated by General Motors subsidiary Cruise were suspended in San Francisco after a pedestrian was knocked down earlier this year.
Tesla’s newly launched Robotaxi (Tesla posted on X)
While the cybercab may be the natural fit for a robotaxi, Adam Jonas of Morgan Stanley believes the preexisting Teslas fleet could play a crucial role. He argues that when combined with FSD and Tesla’s upcoming rideshare mobility app, it will allow owners of those Tesla EVs to put those vehicles on Tesla’s rideshare service. “The true game changer would be unlocking the potential of those vehicles,” he said.
Other analysts believe the cybercab could be the model or basis for a new Tesla passenger vehicle, the long-promised “next-gen” vehicle.
However, the market reacted moderately, with the company’s stock driving down by a percent.
Amidst all this, Catherine Wood, known for making big bets on technology by investing in small and large-cap stocks, claims that robotaxis represents a trillion-dollar-plus revenue opportunity for Tesla over the next five years.
The Self-Driving Car Duel
Analysts remain sceptical about commercialising the service within two years, citing regulatory and technological challenges. Besides, Tesla’s competitors, like Waymo and Cruise, have already deployed robotaxi services in specific areas, giving them a potential edge.
Dan Ives, an analyst at Wedbush Securities, had earlier pointed out that Tesla is “trying to play catch-up” in the autonomous vehicle space, where Waymo has already gained significant traction.
While Tesla continues to develop its technology, it possesses the resources and ambition to launch a robotaxi service. However, it currently lags behind competitors like Waymo, which have successfully implemented such services. On the other hand, it has effectively navigated the complexities of launching and scaling a robotaxi service, demonstrating both technological capability and regulatory compliance.
Robotaxis are Built for Riders, Not for Drivers
“We’ll have a fleet that’s on the order of 7 million that are capable of autonomy. In the years to come, it will be over 10 million and 20 million. This is immense,” said the Tesla chief in July this year. “The car is able to operate 24/7, unlike the human drivers,” he said.
However, Uber CEO Dara Khosrowshahi questioned Tesla’s concept of Robotaxi in a Bloomberg podcast. “The most important factor is, ‘Can we make this technology safe? Can we build trust for riders? For example, in markets where we offer autonomy, half of our riders say,’ No thank you?'” he said.
Similar to Uber, Tesla is also looking to have a shared revenue format with Robotaxi owners. Musk highlighted how Robotaxi will allow users to choose the hours and schedule the hours of operation accordingly, thereby giving Robotaxi owners the choice to use it as both a personal and a commercial vehicle.
Furthermore, scepticism was expressed about the autonomous vehicle feature, noting that when customers are offered an autonomous ride, about half are enthusiastic, saying it would be “really cool.” In contrast, the other half prefer a human driver. However, acceptance of autonomous rides will improve over time.
Even then, the Uber CEO has not denied a likely future partnership with Tesla. “Hopefully, Tesla will be one of those partners. You never know.”
With numerous autonomous vehicles on the market, the key distinction lies in each company’s different approaches toward autonomous capabilities.
