Elon Musk once promised that pivoting Tesla into the self-driving taxi business would generate the automaker trillions of dollars in revenue. Certainly the enthusiasm these kinds of grand proclamations have inspired in investors has kept the company’s stock buoyant, with an astonishing market cap nearing $1.5 trillion. But does the reality on the ground back it up? Not really, suggests new reporting from The New York Times.
For one, Tesla faces steep competition from companies like Waymo that have already been in business for over a decade, and have thousands of robotaxis giving rides across major US cities. It was recently revealed, meanwhile, that Musk’s company only has about 30 capital-R Robotaxis roaming Austin, Texas — the only city where it’s currently offering rides to the public.
Worse yet, the cabs’ presence is barely felt by locals.
“I’ve never seen a Robotaxi in Austin,” Kara Kockelman, a professor of engineering at the University of Texas at Austin who studies transportation, told the NYT. “Waymos are around all the time.”
Perhaps that puny market penetration would be less alarming if Tesla offered advanced tech and a passenger experience that Waymo doesn’t, but its self-driving cabs aren’t even fully driverless, requiring the supervision of a human “safety monitor” who must be present in the vehicle at all times. Numerous instances of the cabs violating traffic laws and an alarming crash rate demonstrate why that policy is still necessary.
It’s reasonable that a newcomer to the field would take time to find its feet, but Musk has promised monumental progress at a whirlwind pace. He said that over a thousand Robotaxis would be operating in Austin “within a few months” of launching, that over a million fully autonomous Teslas would be on the road by 2026, and that the automaker’s Robotaxi operations would cover “half the population of the US” by the end of next year.
Investors take these promises seriously. Musk’s eye-watering trillion-dollar pay package, which they recently approved, requires Musk to oversee the commercial deployment of one million Robotaxis, the NYT noted.
Experts, to say the least, aren’t convinced. One criticism is Musk’s refusal to use radar and lidar sensors to help the cars understand their surroundings. After experimenting with the sensors, Musk swore them off as an expensive “crutch,” and doubled-down on only using cameras to see. Numerous accidents, including one in which a Tesla running the company’s Full Self-Driving ran over and killed an elderly pedestrian while its front camera was blinded by sunlight, have underscored the risks of Musk’s approach.
“I’m still deeply skeptical that Tesla is all that close in terms of building a real automated driving system,” Matthew Wansley, a professor at Cardozo School of Law in New York who has worked for an autonomous driving start-up, told the NYT.
Technology can sometimes advance at a rapid pace, and fortunes can quickly shift in a nascent industry. But right now, Tesla is “way behind Waymo,” Raj Rajkumar, a Carnegie Mellon University professor and pioneer of autonomous technology, told the newspaper.
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