Tesla CEO Elon Musk has said every year for the past decade that this is the year he’ll deliver on lofty promises of enabling millions of fully self-driving vehicles.
Spoiler alert: That hasn’t happened. But Tesla is now rolling out a robotaxi service in Austin, Texas. The company has shared some information about what this venture entails, but there are more questions than answers.
“So far, this launch lags significantly behind the company’s promise and what competitors have already delivered,” Paul Miller, VP, principal analyst at Forrester, said in a statement.
What we know
Tesla is launching a robotaxi service with 10 to 20 Tesla Model Y SUVs (equipped with its Full Self-Driving, or FSD, software) in a geofenced area in Austin, with human safety operators in the vehicle (despite Musk previously saying this wouldn’t be the case) and a teleoperations team capable of accessing and taking control of the vehicle.
“Like all of Tesla’s competitors, these cars will only carry passengers around certain parts of the city,” Miller said. “Also, like competitors, the cars may stop operating in inclement weather. Neither of these limitations should surprise anyone.”
The service, open at first to a select group of invited users, will not initially involve Tesla’s robotaxi product, the Cybercab, which it revealed last fall and is supposed to go into production next year. It’s unclear what version of FSD will be used.
On Tesla’s Q1 earnings call in April, Musk again claimed that the “vast majority of the Tesla fleet that we’ve made is capable of being a robotaxi,” predicting that the company will be able to quickly scale to many other cities.
But at least for now, that’s not what the service looks like. In fact, the rollout looks very similar to how other companies like Waymo have deployed their robotaxis when entering new markets.
Question…?
“Just how mature is it?”
That’s the question Kathy Winter, COO of AV tech startup May Mobility, has about Tesla’s technology. May has partnerships with Lyft and Uber to provide their vehicles with its AV tech.
“I don’t want to denigrate what they’re doing,” she added. “They do a lot to keep it right in the forefront of people’s minds. But it just takes a lot of time and validation and technology maturity to really be safe.”
(Tesla did not respond to Tech Brew’s email seeking comment.)
Many industry observers and stakeholders have raised questions about Tesla’s vision-only approach to autonomy, in contrast to its competitors, which use other types of perception like radar and lidar sensors.
Keep up with the innovative tech transforming business
Tech Brew keeps business leaders up-to-date on the latest innovations, automation advances, policy shifts, and more, so they can make informed decisions about tech.
“What Elon is trying to prove is that vision is sufficient. And if vision is sufficient, that has big cost ramifications,” Neel Mehta, a partner at VC firm G2 Venture Partners who previously worked at Amazon-owned robotaxi startup Zoox, told Tech Brew.
“You need fewer sensors. You need, potentially, a smaller compute. And therefore you can leverage the existing low-cost Tesla vehicles,” he said. “And if that works, that’s going to have a superior cost structure over Waymo. But that’s the thing that we have yet to see the data on. And we’re still in the camp that Waymo’s approach ultimately is going to lead to a safer product in the long run.”
Observers will also be closely watching to see how Tesla’s technology and unit economics stack up against Waymo’s. As of now, there’s much more data on Waymo’s track record, Mehta noted.
The Alphabet-owned robotaxi company has scaled commercial operations to San Francisco, Los Angeles, Phoenix, and Austin; is testing and preparing to deploy in multiple other cities; is averaging more than 250,000 paid rides per week; and has released a safety framework and data supporting the idea that it’s safer than a human driver. In other words, it’s way ahead of the competition—but Musk contends that Tesla’s robotaxi play will outcompete Waymo on cost.
Tesla, meanwhile, has not released similar data demonstrating the safety of its technology.
“It’s not that Tesla releasing the robotaxi is something that’s novel. Waymo has been doing this since 2019,” Mehta said. “What will come into focus is whether Tesla’s approach, which is the vision-only approach using their own lower-cost vehicle platform, can that ultimately work, and if it does work, does that ultimately supplant Waymo?”
High stakes
The rollout comes at a crucial time for Tesla, with its stock down 15% year-to-date and investors clamoring for it to finally deliver on its autonomy promises as it faces a rockier outlook for its core EV business.
Wedbush Securities analysts wrote in a June 20 research note that the robotaxi launch could mark the start of Tesla’s “$1 trillion autonomous era,” and predicted that Tesla would scale the service to “roughly 25 cities in the US over the next year.”
“There will be many setbacks,” they wrote, “but given its unmatched scale and scope globally we believe Tesla has the opportunity to own the autonomous market and down the road license its technology to other auto players both in the US and around the globe.”