Tesla will unveil their new robotaxi on Thursday after much delay. CEO Elon Musk will take the stage at Warner Bros Hollywood Studio to reveal what he dubs a Cybercab.
Musk says the Cybercab will drive itself and work on a ride-hailing network. Tesla will allow Tesla-brand car owners to put their cars in the ride-hailing network and profit from their car’s services. Musk has called the robotaxi product a “combination between Airbnb and Uber.”
Musk and the Tesla robotaxi
Tesla’s plans to develop the Cybercab have been in the works for quite some time. In 2019, Musk was confident he could crack into the taxi industry, claiming that Tesla could do it by 2020. However, the pandemic shifted focus away from the idea, delaying its arrival.
This year, Musk decided to shelve plans for a new, cheaper model of a Tesla car in exchange for the Cybercab, saying that Tesla should not be considered a carmaker but rather an “AI robotics company.”
Tesla was recently valued at $750 billion, and its value could skyrocket to the trillions if the robotaxi product is successful. Investors hope to see how Tesla could mass-produce the Cybercab, whether it is legally feasible, and whether an automated taxi is safer than a human taxi driver.
Elliot Johnson, chief investment officer at Evolve ETFs, said, “They (Tesla) need to get going because this has been sort of discussed, rumored, talked about, and announced in various forms for a while.”
Many investors expect Tesla’s robotaxi to be a long-game product, which will manifest in a couple of years, as opposed to the near future.
“We believe the robotaxi event will be long on vision and short on immediate deliverables or incremental revenue drivers,” said Toni Sacconaghi, a Bernstein analyst, in a research note.
“The company has a track record – particularly in FSD – of being overly optimistic, and there is significant devil in the details,” continued Sacconaghi.
The risk
The robotaxi venture would be a long one for Tesla and Musk. The time it could take them to crack into the taxi industry could fizzle out the project altogether.
Waymo is the only automated taxi service in the US right now. Other companies, like General Motors (GM), have been trying to enter the industry but are delayed by its complications.
However, Tesla has previous experience in developing automated driving, which other companies lack. Tesla cars have been able to drive themselves, and they just released a summoning feature that gets the car to drive to a specific location from where it was parked.
Despite Tesla’s experience in the self-driving car game, investors still believe it will be some time before the Cybercab is ever out, thanks to the regulatory approvals they need.
CFRA Research analyst Garrett Nelson said, “We think this is still several years away, and numerous technological hurdles, safety tests and regulatory approvals are still standing in the way.”