Tesla's Robotaxi event came and went last night, and we finally learned (very few) new details about the highly decorated vehicle that CEO Elon Musk thinks will add $5 trillion to Tesla's market capitalization.
But the main thing that left me (still) thinking is: why does this car exist?
Tesla has been talking about robotaxis for a long time, so it makes sense that it would unveil a robot… right?
But here's the rub: when Tesla started talking about robotaxis, it was in the form of the Model 3 and other cars the company already makes.
Since 2016, Tesla has been talking about the “Tesla Network,” a proposed system that will allow Tesla owners to send their cars to work as taxis once the company has completely solved self-driving.
I said all this in my review of the Tesla Model 3 back in 2018, which showed some details that showed that Tesla was preparing for this robotaxi future – such as the use of the phone as a key and an internal camera to keep tabs. they don't live.
And this will not only apply to certain cars, but to all cars made by Tesla. Because Tesla also said that all of its cars will come with fully self-driving hardware in early 2016.
Musk has even said that Tesla will stop selling cars once it resolves to become independent. The idea is that those vehicles would be more profitable to maintain as robotaxis, that each one would cost $100k-$200k for the job and that they should be considered “appreciation goods” as a result. (Though Musk said last night that Tesla will sell Robotaxis for $30k, contrary to his previous claims).
So there's a long history of Tesla referring to its cars as potential future robots, rather than talking about individual robot products. And it said the same thing last night, as there were 20 Robotaxis and 30 other Tesla vehicles at the event. Musk emphasized last night that all Tesla cars will be able to be autonomous, and even said that existing cars will drive themselves. before until when he says Robotaxi will hit the road in 2026-2027 (although he stumbled and said “we don't smell here” when he tried to elaborate).
But hey, maybe it makes sense to release each Robotaxi product that will focus fully on this task and no other, to save costs and reduce complexity.
That's controversial, and Tesla announced the $30k starting price for the Robotaxi/Cybercab product (even Musk seemed unsure what to call it) is the lowest price of any car the company has sold yet, and among the cheapest we've found. ever seen with an EV (shout out to the all-time value winner, the late Chevy Bolt).
And, I have to say, it looked great out there. Compared to previous renderings/models/spy photos we've seen, I thought the final product looked great. If it was just a normal EV, with that design, a small 2-seater sports car for that price, I'm sold.
A small car, without many of the creature comforts that a driver could wish for, very easy to maintain and easy to clean, can certainly help reduce costs. And that is good and necessary. A $30k car will be available to more people than the $42k Model 3, the next cheapest car Tesla currently sells.
But…. why not a $25k Model 2?
Tesla already had an answer to this question: the canceled Model 2
So if Tesla wants to have a cheap, simple car that can perform robo-driving tasks, and if it's clear that all of its cars will get this capability, why not make a cheaper, simpler car than before. talked about for years: the Model 2.
Not much was known about the Model 2, except that it would be a cheap, small EV, starting at $25,000 – which is considered the entry level for consumer cars (the cheapest gas cars in America are about $17k – and a $25k EV will cost about the same after of a $7,500 federal tax credit).
But earlier this year, it was reported that Tesla was halting development of the Model 2. Musk denied that report, but like many of Musk's denials, it turned out to be true.
Instead, Musk directed the company to pivot to Robotaxi, and casually, he was talking a lot about robotaxis, robots with general artificial intelligence, and various other pie-in-the-sky promises, along with the tech buzzword. Good day..
But while there is a lot of demand for stock a market of CEOs who are constantly talking about AI, there is a huge demand as well car the cheap electric car market. And Tesla is car company, after all, not a stock company (right?).
And what we do knowing from the event that Tesla thinks they can make a self-driving electric car for less than $30k, and that that car will be “overspecified” as to what it is, using a more powerful AI computer than necessary. And they think they can do this within the next 2 years or so.
If these two things are possible, I believe those efforts would be better directed to the Model 2, rather than the Robotaxi.
When Musk said that in the event that existing cars will be fully autonomous before Robotaxi starts shipping, I don't think anyone believes this. After ten years of FSD coming “at the end of next year,” the boy cried wolf and this timeline doesn't seem realistic.
In addition, Musk said it will come to California and Texas first, pending legal approval. Even Tesla it does quickly received regulatory approval in those states, which still limits the market that can be adjusted while working to increase and allow it in other states. The Model 2 assembly process will go much more smoothly than that, and it can be sold around the world much faster.
And while Tesla's car timelines also tend to slip by several years, we've been talking about a “cheap Tesla car” for a long time and its relative similarities to existing cars (as opposed to the big differences involved in making a Cybertruck or Roadster), I also think that the Model 2 could be produced before the Robotaxi could ( especially when considering control time periods).
If so, wouldn't it be better for Tesla to make this car which I believe will be ready before Robotaxi does, which will meet the demand of many consumers right now (especially in the case that there are affordable Chinese EVs. It is popular enough to enforce protective trade measures), which would have global appeal. general, again will that have all the capabilities of Robotaxi and (or if) FSD is finally solved?
Maybe it's about cutting costs… or maybe it's about stock
Now, maybe part of the reason for the cancellation of the Model 2 is because Tesla didn't see enough cost reduction to build an EV for $25k, or thought that the cut rate would be too difficult to sell a desirable car for consumers at that price. With Robotaxi, maybe customers would accept a more bare-bones feeling than the Model 2 owns as a personal car, and maybe that's the only way Tesla can lower the price.
And there's something to be said for a fully autonomous car, with things like adaptive charging and built-in robo-vacuums to clean the car without human intervention (both briefly mentioned in last night's presentation).
But there is definitely a need for a cheap, human-driven EV, and I think Tesla hasn't got it wrong – it would be better to sell a bunch of Model 2s before a bunch of Robotaxi in the long run, because I don't think the full Level 5 FSD, and regulatory approval, is coming within a year or two coming.
Or… maybe all this AI talk is about stocks rather than being about actual products, as mentioned above. This has been a common theory among Tesla haters for a long time, but it has never been true because Tesla makes and sells. many carsand the whole ecosystem around them of energy products like Powerwall and Superchargers, which are efficient and profitable, with very good margins.
But when Musk suggested that Robotaxi would be worth $5 billion in the market, when he went on a month-long attack on the company to sell his stock bonus package to shareholders, and when he went on about long-term dreams that Tesla will change the world in 6 big ways in the next year alone (really next year at this time, I promise), that sounds less like a time for a mature and accessible product and more like a set of actions driven by the desire to, say, make a really bad decision for a personal business that is not funded after TSLA's previously high price.
But when it comes down to it, it seems like Elon has run out of steam. The market, this time, doesn't seem too convinced. Maybe instead of making big promises that no one thinks will be fulfilled, and that you burn the trust of the public every time you make them (or maybe that happens for another reason)… people want a cheap car that everyone can afford. buy.
Do it.
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