- Elon Musk has a giant activity this week: convincing buyers that Tesla is greater than only a automotive firm.
- On Thursday, the Tesla boss will lead Tesla’s Robotaxi Day and share updates on driverless automobiles.
Over its roughly 100-year historical past, the Warner Bros. studio in Burbank has set the stage for a few of America’s most iconic tales. It might achieve this as soon as once more as Elon Musk prepares to make use of the studio lot to inform one other story: that Tesla is greater than only a automotive firm.
On Thursday, the billionaire Tesla boss is ready to take middle stage on the historic web site in California to host Robotaxi Day. The long-awaited occasion — initially scheduled for August — is supposed to offer weight to the electrical car maker’s pitch that it’s a tech firm first and a automotive firm second.
More and extra, Musk has been positioning Tesla as an organization not simply targeted on accelerating the clear vitality transition, very similar to different conventional automakers, however as one which has plans to guide in synthetic intelligence, robotics, and autonomous automobiles.
Musk has performed his half in producing hype, sharing a poster concerning the occasion on social media titled “We, Robot,” alongside claims that the day shall be “one for the historical past books.” But as Musk prepares to unveil a serious a part of his imaginative and prescient for Tesla’s future, he faces a high-stakes scenario.
Tesla’s high-risk pivot
Musk has given buyers sturdy alerts over time about his intent to evolve Tesla into one thing extra than simply an EV maker.
Back in 2019, at Tesla’s then-headquarters in Palo Alto, the EV chief instructed shareholders that by 2020, he was assured {that a} fleet of 1 million driverless robotaxis would swarm the streets and carry passengers. Though he missed this deadline, he has pushed Tesla into different areas.
In July, Musk wrote on X that “Tesla can have genuinely helpful humanoid robots in low manufacturing” for inner use subsequent yr and hopes to ramp up manufacturing to promote them to different firms in 2026. A prototype first proven in 2022 has been dubbed “Optimus.”
More broadly, Musk might look to humanoid robots and driverless automobiles as a method for Tesla to generate worth from AI, the hyped expertise put firmly on Silicon Valley’s agenda after Musk’s fellow cofounder at OpenAI and nemesis Sam Altman launched ChatGPT in late 2022.
That Tesla can seize a broader alternative by means of robots and AI is not only Musk’s conviction. Andrej Karpathy, Tesla’s former director of AI, stated in a latest episode of the No Priors podcast that he does not assume Tesla is a automotive firm; in his view, “automobiles are mainly robots.” Meanwhile, in July, Wedbush analyst Dan Ives claimed the “Tesla AI story might be value $1 trillion-plus and is probably the most undervalued AI title.”
However, what’s vital to notice is the timing for Tesla’s robotaxi push. It comes at a tricky second for Elon Inc. For one, Tesla has been unable to flee gross sales stress that has hit the broader EV market.
In the primary half of the yr, Tesla generated $46.8 billion in income, down from $48.3 billion in the identical interval final yr. While Tesla posted a 6.4% year-on-year soar in deliveries for its third quarter, its worth stays over $600 billion wanting the $1.2 trillion peak it hit in November 2021.
Caspar Rawles, chief information officer at Benchmark Mineral Intelligence, an business agency targeted on market costs and provide chain information for EVs, expects EV development to proceed long-term however acknowledges that latest macroeconomic headwinds have led to a slowdown.
“You’ve seen larger rates of interest, inflation, every kind of hangovers from the pandemic,” Rawles instructed BI. “EV gross sales have grown much more shortly than conventional inner combustion engine automobiles; they’re simply not rising as shortly as individuals thought.”
Reactions to Musk’s total model have turn into extra visceral as Tesla’s shareholder base has cut up on his management following his controversial transformation of Twitter into X and his endorsement of former President Donald Trump.
“Elon purchased Twitter and determined that he was going to turn into a world chief for the rightwing nation of Elonville,” stated Ross Gerber, Gerber Kawasaki Wealth and Investment Management CEO and Tesla shareholder.
Gerber instructed BI that whereas he believed EVs are a enterprise that may be “splendidly worthwhile” — one thing that made the case sturdy to put money into Tesla in years prior — he feels far much less assured concerning the robotaxi pivot.
This is essentially as a result of Musk shall be coming into a market the place opponents have a headstart. Waymo, owned by Google’s guardian firm, Alphabet, struck a partnership with Uber final yr. BYD, a Chinese EV maker, has additionally partnered with Uber to carry “autonomous-capable automobiles” to prospects globally.
In China, Tesla’s largest market outdoors the US, native web big Baidu has already deployed a robotaxi fleet referred to as Apollo Go, first launched in Wuhan in 2022. It is aggressively engaging shoppers with heavy subsidies that translate to dirt-cheap fares.
“Robotaxis, in principle, might be worthwhile so long as there’s not a number of competitors,” Gerber instructed BI. “The drawback is that there’s, and it is already on the highway.”
Questions additionally stay over how assured regulators are concerning the security of robotaxis. Last yr, GM-owned self-driving firm Cruise took a reputational hit following crashes involving its automobiles. Incidents like this have a knock-on impact on how the broader autonomous car area is perceived, together with Tesla’s robotaxis.
That’s very true as a result of specialists assume the absolutely realized model of Musk’s robotaxi ambitions presents technical challenges. Paul Miller, principal analyst at Forrester, stated full autonomous driving means “a car ought to have the ability to drive itself just about wherever a human driver might, on any sort of highway, in any climate situations.”
“It’s extra achievable to permit automobiles to drive themselves on explicit varieties of highway, in identified places, and in particular situations,” he stated forward of Tesla’s Robotaxi Day.
Clearly, then, Musk has a giant story to inform on Thursday. Under the Hollywood lights, he’ll be hoping buyers are keen to imagine in it as a lot as he’s.
