Los Angeles. For a businessman who always has trouble with broken promises, Elon Musk scored big Thursday night at the long-awaited Hollywood unveiling of Tesla’s driverless robotaxis.
After cruising the fake streets of the Warner Bros. movie studio in a sleek, two-door silver prototype called “Cybercab,” Musk promised that the company’s popular Model 3 and Model Y vehicles will be able to drive without driver supervision in California and Texas. next year.
Likewise, he stated that the company will begin building the fully autonomous Cybercab in 2026 at a price of less than $30,000, and showed a robovan capable of transporting 20 people around the city, something that, he said, will reshape cities by “converting parking in parks.
Later came dancing humanoid robots that also mixed drinks at the bar, which Musk said Tesla TSLA.O will also eventually sell for between $20,000 and $30,000 each. “I think this will be the greatest product in history, of any kind,” he declared.
Thursday night’s event, steeped in electronic dance music, had the hallmarks of Musk’s sales, but some Tesla investors and insiders said they were waiting for more concrete details about how the company plans to transform itself from an automaker into a titan of autonomous driving and artificial intelligence with a solid business plan.
Tesla shares fell 6 percent before the start of the session. The stock, which has been hit in recent years by fears that cheaper electric vehicle rivals will eat into Tesla’s market share, has risen nearly 50 percent since April, when Musk announced the shift to robotaxis. Still, shares have fallen 8 percent over the past year, compared with the S&P 500 index’s rise of 33 percent.
“His vision is lovely, but someone has to make it a reality,” said Ross Gerber, a Tesla shareholder and CEO of Gerber Kawasaki Wealth and Investment Management. “For now, for the next 24 months, Tesla has to sell electric vehicles. Why don’t we focus on that?”
Gerber said he likes to see products like the Cybercab and Robovan, but hopes to also see a more traditional, lower-priced mass-market vehicle the company may sell in the near future.
Musk had been promising for years that he would sell a car whose initial price would be around $25,000, a promise that investors considered essential to attract new customers. Reuters exclusively reported on April 5 that Tesla had abandoned this project, causing its shares to initially decline.
Shares of ride-hailing companies Uber UBER.N and Lyft LYFT.O were gaining about 4 percent before the start of the session, in a sign that Musk’s announcements are not seen as a threat to the companies.
Years late
Tesla aims to get ahead of self-driving companies like Alphabet GOOGL.O’s Waymo by pursuing a lower-cost technological path that Musk says will allow the company to scale up its vehicles much faster than its rivals.
Tesla’s strategy is simpler and much cheaper than its rivals, but it has critical weaknesses. The main one is that the artificial intelligence technology on which its autonomous driving system is based makes it almost impossible to determine precisely why there was an accident or other failure, something that could worry regulators.
“Tesla’s software is at least years behind where Waymo is. That’s the hard part. No flashy vehicle design is going to change that,” said Matthew Wansley, a professor at Cardozo Law School in New York.
Tesla’s rivals use similar AI and camera technologies, but add redundant systems and more expensive sensors as a safety measure.
Ramesh Poola, co-chief investment officer at Creative Planning, which owns Tesla shares, said he was impressed by the presentation, but “obviously, we were looking for more details on what exactly its future plans are going to be and how it’s going to monetize this new AI and robotics”.
Specifically, he anticipated that regulators will pose a “major obstacle” to Musk’s plans to move to unsupervised autonomous driving next year. Tesla’s current “Full Self-Driving” driver assistance feature cannot operate safely without a human driver paying constant attention.
“He’s shown the prototypes and there’s certainly some buzz about it,” Poola said. However, widespread adoption of autonomous Cybercabs, in which passengers can hail a taxi through an Uber-style app, is still “three or four years away,” he said.
That’s not necessarily a bad thing, he said, adding that he will tell his clients not to sell Tesla stock. “There are many avenues to monetize this technology. Cybercab may not necessarily be next year, but along the way, the viability is there,” he commented.
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