Tesla Inc. will launch its long-promised robotaxi service in Austin next month because it has to. The countdown began just over a year ago when news broke that the company had abandoned its cheap electric vehicle project and Chief Executive Officer Elon Musk responded by announcing a robotaxi unveiling, scheduled for August. Delayed to October, that event was a flop, with the vehicles confined to a studio lot and guests heckling Musk on when the real robotaxis would appear. With Tesla’s core EV business having slumped since then, it is Musk’s repeated promises of a June rollout that have pushed the stock back up to a ridiculously high multiple and trillion-dollar valuation.
Missing another deadline is not an option. But far from Musk’s grand vision of self-driving Teslas running around everywhere, what we will likely get in Austin is a minimum viable robotaxi. For Tesla diehards, it will nonetheless be enough to bolster their faith — even as it reveals the risks to their favorite company’s entire autonomy project.
Musk has spoken of launching 10-20 vehicles, initially. Who they carry, and when, where and how they do so, are all important variables. “There are a thousand ways to game the optics of a launch,” says Alex Roy, general partner at New Industry Venture Capital and an expert on autonomous vehicles.
The operational design domain can limit where driverless vehicles go, on which type of roads, at what speed and even during which hours. For example, when Cruise LLC, the former robotaxi startup backed by General Motors Co., first got going in San Francisco, paid rides were only available at night, when roads are emptier. Waymo LLC, the leading robotaxi company in the US, owned by Alphabet Inc., has operated in San Francisco for years but still doesn’t yet serve that city’s airport. Tesla can also choose who gets these initial robotaxi rides. I strongly suspect there will be more Tesla-enthused influencers in the Austin area than usual next month, eager to post footage of their experience.
Tesla’s backup will be critical. All robotaxi services require remote operators to help autonomous vehicles get unstuck from situations that confuse them or even, if necessary, take over driving. Tesla’s support will tend toward the former, less interventionist approach, according to comments made on the last earnings call by Ashok Elluswamy, head of Autopilot engineering.
Tesla will likely pack these remote ranks for the Austin launch, despite the expense. Building a profitable robotaxi business requires reducing the ratio of such support staff per vehicle, but this isn’t about Tesla’s earnings; it’s about the multiple. That means shoring up what Roy terms “narrative command”; the sorcery by which Tesla somehow defines the conversation around autonomous vehicles, including with terms like “robotaxi” and “Autopilot,” despite the lack of autonomous vehicles. Musk must deliver something and it must be safe. It only took one bad accident, and a botched response, to derail Cruise.
Clearly, a couple dozen robotaxis in one city backed by a phalanx of remote operators would be closer to Waymo’s model than the generalized autonomy Musk has pitched for years. But investors have clearly made their peace with that already and, assuming the Austin launch creates buzz and avoids accidents, Tesla can take the opportunity to throw the story forward again. Indeed, Musk said on the latest earnings call that he felt “confident in predicting large-scale autonomy around the middle of next year.” Belief is his chief currency. Yet the launch also unlocks three significant risks.
First, Musk’s politicking has turned Tesla showrooms and chargers into targets for his opponents, and robotaxis may also be in the crosshairs.
Second, by definition, Tesla’s robotaxi effort will now transition from pure speculation to something more tangible and, therefore, measurable. They will be like rolling advertisements for Tesla’s progress, and will also start the clock on how quickly the company expands coverage. Musk predicts an s-curve and he needs it, especially as Waymo appears to actually be on one already.
Missing another deadline is not an option. But far from Musk’s grand vision of self-driving Teslas running around everywhere, what we will likely get in Austin is a minimum viable robotaxi. For Tesla diehards, it will nonetheless be enough to bolster their faith — even as it reveals the risks to their favorite company’s entire autonomy project.
Musk has spoken of launching 10-20 vehicles, initially. Who they carry, and when, where and how they do so, are all important variables. “There are a thousand ways to game the optics of a launch,” says Alex Roy, general partner at New Industry Venture Capital and an expert on autonomous vehicles.
The operational design domain can limit where driverless vehicles go, on which type of roads, at what speed and even during which hours. For example, when Cruise LLC, the former robotaxi startup backed by General Motors Co., first got going in San Francisco, paid rides were only available at night, when roads are emptier. Waymo LLC, the leading robotaxi company in the US, owned by Alphabet Inc., has operated in San Francisco for years but still doesn’t yet serve that city’s airport. Tesla can also choose who gets these initial robotaxi rides. I strongly suspect there will be more Tesla-enthused influencers in the Austin area than usual next month, eager to post footage of their experience.
Tesla’s backup will be critical. All robotaxi services require remote operators to help autonomous vehicles get unstuck from situations that confuse them or even, if necessary, take over driving. Tesla’s support will tend toward the former, less interventionist approach, according to comments made on the last earnings call by Ashok Elluswamy, head of Autopilot engineering.
Tesla will likely pack these remote ranks for the Austin launch, despite the expense. Building a profitable robotaxi business requires reducing the ratio of such support staff per vehicle, but this isn’t about Tesla’s earnings; it’s about the multiple. That means shoring up what Roy terms “narrative command”; the sorcery by which Tesla somehow defines the conversation around autonomous vehicles, including with terms like “robotaxi” and “Autopilot,” despite the lack of autonomous vehicles. Musk must deliver something and it must be safe. It only took one bad accident, and a botched response, to derail Cruise.
Clearly, a couple dozen robotaxis in one city backed by a phalanx of remote operators would be closer to Waymo’s model than the generalized autonomy Musk has pitched for years. But investors have clearly made their peace with that already and, assuming the Austin launch creates buzz and avoids accidents, Tesla can take the opportunity to throw the story forward again. Indeed, Musk said on the latest earnings call that he felt “confident in predicting large-scale autonomy around the middle of next year.” Belief is his chief currency. Yet the launch also unlocks three significant risks.
First, Musk’s politicking has turned Tesla showrooms and chargers into targets for his opponents, and robotaxis may also be in the crosshairs.
Second, by definition, Tesla’s robotaxi effort will now transition from pure speculation to something more tangible and, therefore, measurable. They will be like rolling advertisements for Tesla’s progress, and will also start the clock on how quickly the company expands coverage. Musk predicts an s-curve and he needs it, especially as Waymo appears to actually be on one already.
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