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Elon Musk has crafted a narrative about the potential of robotaxis — a self-driving, self-funding Optimus Taxius that could transform the economics of Tesla. Now, a grand reveal is finally upon us at the company’s “We, Robot” event, which starts at 7 p.m. ET tomorrow. Will Musk deliver? For Tesla and its shareholders, the stakes are high. As competition in electric vehicles has intensified, squeezing the company’s margins, and Tesla’s rapid sales growth has slowed, Tesla’s stock has come under pressure. At its peak in November 2021, Tesla was worth more than $1.2 trillion; today it’s closer to $770 billion (though that’s still more than 3x what its next most valuable competitor, Toyota, is worth). Some financial analysts bill robotaxis as the company’s future. |
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Let’s talk reality |
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The truth is, robotaxis are already here. In June, Google-backed Waymo opened up its services to the public, and it now counts ~700 vehicles in several cities, which are completing more than 100,000 self-driving rides a week. That progress is off the back of years of testing — Waymo autonomous vehicles racked up ~4.9 million miles in 2023, according to the California DMV, more than any other company that filed reports (Tesla does not report data). |
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Waymo has plans to expand slowly, with a small number of robotaxis in geofenced environments. Elon Musk described Waymo’s technology as “quite fragile” and not able to scale because it is a “very localized solution.” Amazon’s Zoox has also released plans to launch services in Las Vegas from next year, whilst GM-owned Cruise recently resumed its operations after an accident in 2023. If Tesla does deliver its iPhone moment, revealing some amazing prototype that could bring robotaxis to the masses, the question will pivot once again to: how do you convince people they are safe? A Forbes legal survey from July revealed that 93% of people have at least some concerns about self-driving cars. |