Tesla faces a watershed moment on Thursday when CEO Elon Musk takes the stage at the Warner Bros Hollywood studio to unveil much-delayed plans for a robotaxi, a project that has reignited the electric vehicle maker’s stock, despite cooling expectations for EV growth.
Musk has said Tesla’s robotaxi product—called a Cybercab—will be a new model of vehicle that can drive itself and work on a Tesla ride-hailing platform. Tesla will also allow owners to make money off their cars by putting them on the ride-hailing network as autonomous cabs, which he has called a “combination of Airbnb and Uber.”
Tesla’s Full Self-Driving software relies on cameras and artificial intelligence to drive current cars, with driver supervision but without the costly additional hardware associated with radar systems and lidar technology that other robotaxi players use.
Musk expects that improving this technology will let him crack a still-nascent and tightly regulated industry that has resulted in billions of dollars in losses for others.
Investors, attracted by Musk’s estimate that Tesla’s robotaxi business could drive the company’s valuation to $5 trillion from $750 billion now, want to see a prototype and learn how quickly Musk can mass-produce it, at a profit. They want to understand regulatory hurdles and how FSD, still categorized as a type of partial automation, can become safer than a human driver.
“They need to get going because this has been sort of discussed, rumored, talked about and announced in various forms for a while,” said Elliot Johnson, chief investment officer at Evolve ETFs, which manages investments in Tesla. He does not expect anything announced on Thursday to have a financial impact for one to two years.
Musk said in 2019 he was “very confident” the company would have operational robotaxis by the next year. This year he shelved plans for a new, affordable vehicle in a sharp pivot to robotaxis. Tesla “should be thought of as an AI robotics company,” not a carmaker, he said.