Tesla launches "robotaxis" (with humans)!
As predicted, no full autonomy yet (or ever, imho, without more tech).
Tesla’s Austin “robotaxis” are not yet fully autonomous — but they’re a start. And Wall Street loves them. I will bet Elon $1 that Tesla’s current approach to full autonomy will not work and that the company will end up adding LIDAR and/or other Waymo-like tech. But, either way, Tesla is finally (sort of) in the robotaxi game.
As you may recall, I predicted last month that Tesla would not launch fully autonomous robotaxis in Austin in June.
I predicted that, instead, the company might launch something it would call robotaxis, but that there would be a big catch — namely, that the cars would have a human in them, or be driveable remotely by humans, or something.
And that is in fact what Tesla started piloting in Austin, Texas, yesterday — cars-for-hire that mostly drive themselves but also require human “safety monitors” to sit in the front seat, as well as remote operators standing by who can take over if the cars get in a pickle.
(The humans in the front are sitting in the passenger seat, which is a twist. But they’re still there to minimize the “tail risk” of challenging situations that cause problems for Tesla’s self-driving technology, as such situations always have).
Robotaxis with humans in them is not what Elon Musk promised in January, which was fully autonomous robotaxis “with no one in them.” And it’s not what Elon has been promising since 2019 — namely, “millions” of fully autonomous Teslas driving themselves everywhere.
But, yes, maybe, it is (finally) a step toward that.
And, yes, Wall Street loves it.
Tesla’s stock is up 10% this morning. Wedbush analyst Dan Ives took a bunch of rides around Austin yesterday and described a marvelous, personalized experience and cars that handled some tricky situations.
And, yes, maybe, someday, Tesla will finally be able to offer what robotaxi-leader Waymo has been providing for five years — truly autonomous vehicles.
But, I would guess, not without Elon adjusting his conviction that full autonomy is possible or desirable using only Tesla’s cameras plus AI technology instead of the full LIDAR and mapping technology that Waymo uses.
The great autonomous-technology debate
The reason the humans-in-the-cars and “tele-operability” (remote human able to take over) details are important is not that Tesla has, once again, overpromised and underdelivered.
Elon has always promised the stars and delivered the Moon.
The reason this is important is that Tesla’s self-driving technology still doesn’t work well enough for full autonomy — and, in the opinion of many experts, never will.
As a reminder, Waymo uses LIDAR and mapping technology in addition to cameras-plus-AI. Waymo launched its first public robotaxis five years ago and is now providing more than 250,000 rides per week.
Tesla, meanwhile, has always dissed Waymo’s technology as needlessly complex and expensive (and goofy-looking?) and, instead, promised autonomy with just cameras and neural networks. And although cameras-plus-AI do drive great most of the time, it’s the sometimes edge-cases that are the challenge.
Yes, as Elon often observes, humans can drive using (mostly) just eyes and brains, so, theoretically, cars should be able to, too. But weather, sensor limitations, and ever-changing circumstances still seem to befuddle the cameras-plus-AI technology often enough that the cars just can’t quite become fully autonomous. Thus the need for human safety monitors and remote-driving-capability, even in one small geofenced area in one small city.
Once Tesla finally nails the technology, Tesla has long promised, it will convert even existing Teslas into fully autonomous vehicles that clobber Waymo in the robotaxi market and even allow Tesla owners to run side-hustles in which they can rent their autonomous Teslas to people nearby.
Elon has been preaching for a decade that this happy day is only a couple of years away. And, way back in 2019, he promised that, in a year, there would “for sure” be a million fully autonomous Teslas on the road.
But, despite a decade of work, Tesla has still been unable to deliver full autonomy. And, as the details about the pilot launch show, it’s still unable to do that.
So even as Tesla bulls drive Tesla’s stock to even more astonishing heights, I would respectfully note that… unless/until Teslas no longer require a human co-pilot in the front seat (or, arguably, tele-operability, which also has limitations), the dream of a fully autonomous Cybercab (which has no front seat) and millions of autonomous Teslas will remain unrealized.
The value of Tesla’s stock depends on tens of millions of fully autonomous cars
As we’ve discussed, only a small fraction of Tesla’s per-share price is attributable to its car sales business ($75, in Morgan Stanley analyst Adam Jonas’s view). The rest depends on businesses and products that Tesla hasn’t launched yet.
One of these is robotaxis.
Jonas estimates that about 20%-25% of Tesla’s stock value is based on robotaxis. So Tesla needs to be able to offer them eventually — without human safety monitors, and, likely, without remote driving capability.
Of course, Tesla can always add LIDAR, et al
I personally will bet Elon a dollar that Tesla will not figure out how to deliver reliable, safe, full autonomy without adding LIDAR and other Waymo-like technology to its cars.
If Elon’s right, and Tesla does deliver that, I’ll pay up.
And if I’m right, Elon can pay me, and Tesla can just add LIDAR, et al, and move on.
Because, fortunately for Tesla — and Tesla shareholders — it’s actually not critical that Tesla ever figure out how to make cameras+AI work for full autonomy. The costs of LIDAR and mapping tech are dropping fast enough that, soon, Tesla will be able to add it to some cars without making them prohibitively expensive.
And given Elon’s astonishing marketing talent, Tesla will probably persuade everyone that’s what it planned to do all along.
Thank you for reading Regenerator! We’re the publication for people who want to build a better future. We analyze the most important questions in the innovation economy — tech, business, markets, science, policy, culture, and ideas. Disclosure: I own Tesla stock through index funds.
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