Tesla’s fundamentals are deteriorating, so the old robotaxi promise comes true again 59 yuan
Elon Musk announced after the market closed today (April 5) that Tesla (NASDAQ: Tesla) will launch robot taxis on August 8. He didn’t reveal what year it was, but maybe we should assume it’s 2024:
When we saw this announcement today, I and many others laughed because it was so obvious what had just happened. Shortly after the market opened, Reuters broke the bombshell news, citing sources and documents, that Tesla had at least temporarily abandoned development of its $25,000 “Model 2” car, which otherwise could be released as early as 2027 or 2028. :
Exclusive: Tesla scraps low-cost car plans amid intense EV competition in China
Reuters sought comment from Tesla before publication but did not receive a response.after release The article stated that the stock immediately fell by at least 4%. Then, after the Reuters article was published, Musk issued a condemnation without specifying what he believed was wrong in the article:
Tesla shares regained some of their losses earlier in the day on Musk’s rebuke.
In the Reuters article, they claim to have multiple sources and have seen various documents/letters supporting their central claim. Musk said they were wrong. I’m not going to give an opinion on who’s right because I simply don’t know and haven’t seen any evidence. Other investors, both long and short, may be in the same position.
Elon ups the ante
So far, so good. Barring an intrusive investigation, the story will likely be left to the dust, pending details in Tesla’s likely April 23 financial results conference call and its 10-Q report, which is typically filed a few days later.
However, Musk couldn’t let go of the problem. After the close, he tweeted the announcement that the aforementioned robotaxi would be released on August 8th (possibly in 2024).
It was obvious to me that this wasn’t the plan a few hours earlier. There is no doubt that this statement was made on the spur of the moment in response to the Reuters confusion. but why? what does that mean?
First define
Anyone “in the industry” usually takes the public’s knowledge of the industry’s definition for granted, but this is always the first point of contention. What is a robotaxi? It’s a car that drives 100% on its own and is as safe as a regular human driver. When and where to drive? Just like a human driver: anywhere, in any weather, under any conditions.
This is a difficult task. It’s one thing to drive slower in a geofenced area on a good day. Navigating and off-roading in a snowstorm in Park City, Utah? Much more difficult.
Robotaxi is also known as “Level 5” autonomous driving. When someone says “Level 5,” they’re talking about robo-taxi: There is no driver input of any kind: the car can drive itself, with no one on board, or a blind person in the back seat.
lied to me again
This isn’t the first time Elon Musk has promised Level 5 (robotaxi) capabilities. The first was on October 19, 2016, when Musk hosted a conference call to announce this (transcript}:
Transcript: Musk’s Autopilot 2.0 conference call
Here are the first words Musk said:
“The basic message is that all cars coming out of the factory are equipped with the hardware required for Level 5 autonomous driving, so in terms of cameras, computing power, every vehicle we produce based on the 2,000-car-per-week order is equipped with these hardware, Now shipping, Level 5 literally means driverless capability with the hardware capabilities for full autonomous driving.”
This was big news in October 2016 – even if he said it for the first time today, it would be big news. The fundamental problem is that this is clearly not true. Since Level 5 (self-driving taxis) was announced in 2016, no vehicle Tesla has produced has come close to Level 5. Not even level 4 or 3 yet. Tesla’s “Full Self-Driving” system is still a Level 2 system: you must keep your hands on the wheel and your eyes on the road at all times, just like a Volkswagen Bug from 1972, or at least a Volvo from 2014.
Shame on you for lying to me.
April 2019: 1 million robotaxis!
Some of you may remember Tesla’s second non-existent robotaxi launch on April 22, 2019. What I wrote that day about the event is still valid:
Musk had promised that Tesla would have 1 million robotaxis on the road within a year of his April 2019 speech. In other words, by 2020 (April). It’s now April 2024, and Tesla still doesn’t have a single robotaxi anywhere. Tesla is still stuck at Level 2 autonomous driving, let alone Level 3 or 4. No level 5 (self-driving taxis) in sight yet.
In fact, Tesla hasn’t even started testing robotaxis yet. You see, automakers are required to submit driving reports to regulators, particularly in California (where Tesla’s driver assistance work has been done since its inception), to show what they’re doing and how they’re progressing from a safety perspective. Companies like Waymo (owned by Alphabet) and Cruise (owned by General Motors) have been filing these reports for years. As of February 2024, they have driven a total of 6 million miles in these tests:
2023 California Disengagement Report
How many robotaxi test miles does Tesla report? View report: zero. Yes, zero.
There are only two possibilities:
-
Tesla has not yet started testing robotaxis.
-
Tesla is testing robotaxis but has refused to report the results of its mandatory testing to authorities as required.
Choose your poison. Either way it’s bad.
Fooled me twice, shame on me (or you).
Are you here to lie to me again?
Five (5) years have passed since Tesla released its second robotaxi (Level 5). A few months after the first (October 2016) robotaxi launch, this routine has become comical. Obama was president at the time. Nvidia is an almost unheard of small-cap company. Millie Vanilli remembers it well. The promise was made, and a long time ago.
Tesla is already fighting against the odds
As we saw with Tesla’s quarterly sales report released a few days ago (April 2), Tesla’s business is now in complete decline by its most generous metric (sales). Margins have been falling for a year. Reuters then published an article claiming that development of the $25,000 “Model 2” had been halted. Suddenly, news about Tesla’s robotaxi released on “August 8” suddenly appeared on Musk’s Twitter account. How convenient!
As we used to say during the Cold War, this is no coincidence. Rivets are starting to pop out of the Tesla stock market supertanker, which is down more than 50% from its November 2021 highs. Musk panicked and now again promised that the robot taxi will be “unveiled” on August 8th, which may mean 2024, not 2025 or 2044.
I have no doubt Tesla will produce an impressive demo and promise it will be available soon, “pending final software testing.” Here’s the rub: There’s always a “but,” and that “but” comes nearly eight years after the October 2016 release of the first robotaxi (level 5 self-driving). Still no tests submitted to the authorities (recently), still requires hands on the wheel and eyes on the road. We are still far from autonomous driving.
I doubt this “robo-taxi” will be put to a truly independent and widespread test on August 8th, no matter what year it is. Rides may be offered in ideal sunny weather, in a familiar setting (Silicon Valley, Austin, etc.). Rides may be strictly supervised. In other words, not the real world – not level 5 and therefore not a viable robotaxi.
I’m sure we’ll hear Musk’s confident declaration that we’re finally “very close,” but we’ve heard that movie before. There’s just no evidence for this.
