Tesla Robotaxi: What we know

After a series of delays, Tesla’s Robotaxi reveal is finally upon us and will be held in Los Angeles, California on Oct. 10. The company is expected to hold the event a Warner Bros. Studio’s film lot, and sightings of a small fleet of Tesla vehicles, as well as some heavily camouflaged potential Robotaxi prototypes, have popped up in and around the campus.

Tesla shareholders, fans, and analysts will be anxiously watching the reveal for any glimpse of updates on the so-called Model 2, which, if rumors are to be believed, is all but scrapped as Tesla refocuses resources and attention on the Robotaxi project.

Lofty ambitions and a future with a million Robotaxis on the road

Tesla is planning the Airbnb of autonomous vehicles

Musk has long promised that fully autonomous driving would be a game-changer, and that it would become a reality sooner rather than later. During a fundraising call in April 2019, Musk said, “Tesla will have over a million Robotaxis on the road next year. No other company is close.”

He painted a vision of Tesla’s cars generating passive income for their owners, saying in 2019, “You could be at home asleep and your car could be out making money for you.” The idea here was that all Tesla models would be equipped with cameras and computing hardware capable of managing full autonomy, even if the software had not yet matured enough.

During this year’s Tesla’s annual shareholder meeting, Musk clarified that the Robotaxi program will function much like Airbnb does. In the future, Tesla owners could choose to participate in the program, and enter into a revenue sharing agreement. Tesla, meanwhile, would have its own fleet of dedicated Robotaxi vehicles.

While Musk is known for his lofty and often severely delayed promises, Tesla somewhat consistently delivers at least a version of these visions, so it remains to be seen if the Robotaxi will follow suit. Fast-forward five years from those statements, and we may be getting our first glimpse of this future he spoke of so highly.

All part of the plan

Part two

Musk wrote the original “Master Plan” for Tesla back in 2006, outlining how the company would design an electric sports car, then spend the following decade developing electric vehicles that became more affordable with each generation. This is exactly what Tesla did, releasing the Tesla Roadster in 2008, the Model S in 2012, and the Model 3 in 2017.

In 2016, Musk wrote and released the “Master Plan, Part Deux,” in which he discussed autonomous driving in Tesla vehicles and what that might eventually look like. “When true self-driving is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere. Once it picks you up, you will be able to sleep, read, or do anything else en route to your destination,” he wrote at the time. Tesla shared a rendering of what their ride-hailing app might look like as a part of their investor deck for their Q1 2024 earnings report.

Tesla shared this ride-hailing app prototype, while noting it was “Demonstrative only. Actual look and features subject to change.”

Part of the plan was also to introduce the concept of Tesla vehicles operating in an autonomous fleet to generate taxi-like income. In describing what this might look like, Musk wrote, “You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost.” The implementation, cost, capability, and crucially, regulatory approval of this grand plan, all remain to be seen.

Will Full Self Driving (FSD) finally be realized?

Tesla’s future depends on it

After years of promises, Tesla’s FSD Beta finally launched to a select set of drivers in 2020. Since then, the “Full Self Driving” software package has been through a number of iterations, each one improving slightly on the last in the hopes of finally cracking autonomous driving. It is this software that will presumably run the Robotaxis of the future, whether in existing Tesla vehicles, or on a new platform made exclusively for the Robotaxi fleet.

In a bid to increase consumer education around FSD, Tesla now requires all test-drives for new Tesla models to include a rundown and test of the FSD system, which can now be added to any vehicle for a $99 per month subscription. If Robotaxi functionality truly ever comes to existing vehicles, what might the profit share structure be? Will an FSD subscription be required to use your car as a Robotaxi? We’ll hopefully get the answers to all these questions and more in October.

The Robotaxis role in the future of Tesla

Everyone will be watching

For the valuation of Tesla as a company to ever truly make sense, enormous strides in autonomy and innovation that have been promised for years must absolutely take place. Shareholders expect that Tesla will eventually launch a fully capable, street safe, level 5 self-driving vehicle, an insanely high goal by any metric.

A convincing unveiling of at least a partially complete, though realistically not launch-ready, Robotaxi product is crucial for Tesla at a time when the company seems plagued with setbacks, and shareholders have grown skeptical of the company’s near-term future. We’ll be listening with an open mind in October to what the unveiling has in store, assuming the highly anticipated reveal is not delayed any further.