Elon Musk and Tesla are set to reveal their latest ambitious venture on Thursday night: self-driving “robotaxis.” The event, held at Warner Bros. Studios in California, is being touted as a pivotal moment in the company’s history, with some analysts likening it to Apple’s iPhone launch. However, with years of unmet promises about autonomous driving, Tesla faces considerable skepticism as it gears up for this highly anticipated reveal.
Robotaxis: What Tesla Might Announce
The upcoming announcement will outline Tesla’s plans for fully autonomous robotaxis, designed to compete with ride-hailing services like Uber and Lyft. The company may also unveil a vehicle model specifically for the Robotaxi fleet, which Musk has referred to as the “Cybercab.” The new ride-hailing service would potentially use both Tesla-owned vehicles and cars owned by Tesla customers, who could rent out their cars when not in use, earning income while Tesla takes a cut of the revenue.
The move would mark Tesla’s most significant step yet toward commercializing its autonomous vehicle technology. However, doubts linger over whether the company can achieve full autonomy anytime soon, particularly given the regulatory hurdles involved. Recent incidents, such as GM’s Cruise unit having its driverless vehicle permits suspended in California following a serious accident, underscore the challenges of deploying fully autonomous cars at scale.
Past Promises, Lofty Claims, and Missed Deadlines
For nearly a decade, Musk has insisted that fully self-driving Teslas were just around the corner. As far back as July 2023, he claimed that “unsupervised [driving] could be possible by the end of this year.” Yet, he admitted, “my predictions on this have been overly optimistic in the past.” In reality, Tesla has repeatedly missed deadlines for delivering truly autonomous vehicles.
Despite offering a “Full Self-Driving” (FSD) feature for an $8,000 fee, Tesla still requires drivers to remain behind the wheel and be prepared to take control at any moment. Independent tests have found that drivers must intervene frequently—on average, every 13 miles. Analyst Gordon Johnson, a longtime Tesla critic, has stated, “You’d have three accidents every hour,” if drivers did not frequently take control, indicating that Tesla’s autonomous technology remains far from ready.
Investor Expectations, High Stakes and Lingering Skepticism
The stakes for Thursday’s announcement are exceptionally high. Analysts like Dan Ives of Wedbush Securities have described the event as a “fork in the road moment” for Tesla, with the potential to either wow investors or leave them unimpressed. Ives believes it could be remembered as one of Tesla’s most important events, comparable to the launch of the iPhone for Apple.
Gene Munster, managing partner at Deepwater Asset Management, shares optimism about Tesla’s long-term prospects but is cautious about the event’s impact on investors. “If it’s anything more than three months out, then investors will take it with a grain of salt,” Munster said, emphasizing that the timing of any new developments will be crucial. He added that while Tesla is progressing, the technology is still “three to five years away” from widespread deployment, given the challenges of reaching near-perfect safety standards and regulatory approval.
Regulatory Hurdles, More Than Just Technological Barriers
Even if Tesla’s technology advances quickly, regulatory approval remains a significant obstacle. Safety concerns around autonomous vehicles persist, especially after incidents involving driverless cars. Tesla’s competitors, such as Waymo and Cruise, have also faced scrutiny from regulators, who could halt operations if accidents occur. Munster noted that reaching 99% safety is not enough; regulators may demand safety levels as high as 99.999%, which would require years of refinement.
The challenge extends beyond technology to public perception and legal frameworks. Tesla must prove that its robotaxis are not only safer than human drivers but also sufficiently reliable to gain regulatory approval in multiple jurisdictions. The recent suspension of Cruise’s permits in California illustrates the risks that all autonomous vehicle operators face, even after gaining initial approval.
Could Robotaxis Transform Tesla’s Business Model?
Musk has long argued that robotaxis will fundamentally change Tesla’s business by generating more revenue from ride services than from car sales. The concept envisions Tesla owners making back the cost of their vehicles by renting them out for rides, similar to how Airbnb operates in the accommodation space. If successful, this model could significantly boost demand for Tesla cars and increase the company’s revenue streams.
However, realizing this vision requires overcoming both technological and regulatory challenges. Analysts like Gordon Johnson remain skeptical, arguing that Tesla’s autonomous capabilities still lag behind competitors. Meanwhile, others like Ives and Munster see Thursday’s announcement as a potential catalyst for a breakthrough but acknowledge that a lot will depend on the specifics disclosed at the event.
Looking Ahead, The Promise and Pitfalls of Autonomous Driving
The Robotaxi announcement will mark Tesla’s latest attempt to fulfill Musk’s longstanding vision of a fully self-driving car. While the technology has come a long way, many experts believe there is still a significant gap to close. The next few years will likely determine whether Tesla can deliver on its autonomous driving promises or if regulatory and technological roadblocks will continue to delay progress.
Ultimately, the outcome of Thursday’s event will impact Tesla’s stock price and could shape the future of autonomous driving. If Tesla can deliver a clear and credible roadmap, it could pave the way for broader acceptance of autonomous vehicles. If not, the skepticism surrounding Musk’s repeated promises may deepen.
Tesla’s Robotaxi event represents a critical moment for the company, as it aims to showcase advancements in autonomous driving and redefine the future of transportation. The promises are grand, but so are the challenges. As the world watches, Musk will need to provide more than just a vision—he will need to deliver a tangible plan that can overcome both technical limitations and regulatory scrutiny. Whether this event will be a game-changer or yet another unfulfilled promise remains to be seen.