Tesla's Robotaxi Dreams Are Dead
And Musk is running away from the problem.
Self-driving has been a core part of Tesla for well over a decade. It is what prompted investors to classify it as a tech company rather than a manufacturing company and is what has driven its valuation to dizzying heights through insane speculation. Cathie Wood has gone on record to state that Tesla’s self-driving technology will become its main income source by 2029, adding more than $7 trillion to the company’s already ridiculous value. But unfortunately, the wheels have fallen off, and this fever dream is dead on arrival. This is utterly devastating for Tesla, and how Musk plans to treat this self-inflicted wound will only make the situation worse.
In October, Musk announced that Tesla plans to expand its tiny experimental ‘Robotaxi’ fleet in Austin, Texas, to 500 vehicles. But, last month, Musk revised this to “roughly doubling” the number of Austin Robotaxis by the end of December, which would mean only 60 vehicles. That is an underperformance of around 88%!
And, to make matters worse, these aren’t really robotaxis. Legally, there still has to be a driver in the car who monitors the system.
Now, Musk wanted to expand fully driverless Tesla Robotaxi services in Phoenix, San Francisco, Miami, Las Vegas, Dallas, Austin and Houston by the end of this year. However, Tesla’s FSD (Full Self-Driving) system is apparently so unfit for purpose that it can’t pass any of these cities’ safety requirements and so has failed to obtain a permit to even operate supervised operations for these cities! This appears to be why Tesla has failed to deliver 500 Robotaxis to Austin, since they are unable to obtain a permit to operate that many of them, which is almost certainly due to how badly they drive. If you want to know just how horrifically Tesla’s Robotaxis drive, read my previous article here.
Instead, there are just a few dozen “Robotaxis” in Austin, each with a legally mandated driver in the passenger seat who has their finger on a kill switch. This makes them a “supervised” pilot program, rather than a fully autonomous system. To make matters worse, the driver has to switch to the driver’s seat during a more challenging route, something which I’m sure comforts passengers. There are also a few “Robotaxis” in San Francisco, but they legally have to have a driver in the driver’s seat ready to take control at a moment’s notice. You know, just like an Uber driver that shelled out for FSD.
So, technically speaking, Tesla has zero fully autonomous taxis and fewer than 100 augmented taxis. Oh, and these augmented taxis cost more to operate than conventional taxis, because the FSD AI is not free, even for Tesla, and you still have to pay the driver. This isn’t from lack of trying or lack of capacity. No, this underwhelming rollout is because legal authorities do not want a system this unsafe on their streets.
If you want to know why Tesla’s FSD system and its Robotaxis suck so much, read my previous articles here and here. But, in short, Musk single-handedly ruined the system by taking a vision-only approach and leaving zero redundant safety features in place. As such, the system relies on developing nearly 100% accurate AI to get even close to acceptable levels of safety. This is something that everyone is finally realising is totally impossible.
I just want to take a moment to compare this to Tesla’s main rival, Waymo. They have well over 2,000 fully autonomous robotaxis in the US, operating in five major US cities, with services being actively rolled out in six more, including London and Tokyo. This should give you an idea of just how far behind Tesla’s self-driving capabilities are. London is widely considered one of the hardest places to deploy self-driving technology, as it has complex, archaic streets, highly strict traffic safety laws, and locals who begrudge change. Yet Waymo is breaking into that market before Tesla even has a permit to run a single ‘unsupervised’ Robotaxi.
And it seems that it isn’t just legal authorities who don’t want to touch FSD with a ten-foot barge pole. Other manufacturers are staying well clear.
One of the potentially huge income streams for FSD was Tesla licensing the technology to other manufacturers. After all, if Tesla develops a self-driving system, or even a driver assist system, that outperforms the competition, as they have promised for over a decade now, then other manufacturers would be better off licensing Tesla’s system than trying to develop their own. That alone could have brought in billions of dollars in revenue each year, and many investors were betting on it.
Tesla recently showed off data which demonstrated that FSD is seven times safer than a human driver. So surely manufacturers were queuing around the block to get their hands on it. Right?
Well, last month Musk admitted that even after offering to license FSD for a small fee, no manufacturer wants it. We might understandably wonder why Musk wants to sell it for a ‘small fee’. Could it possibly be because very few people are buying FSD, and the entire project needs to get more people in the door to justify its crappy existence? But the fact is, this shows that other manufacturers do not want the system at all. If you read my article debunking Tesla’s ‘seven times safer than a human’ claim, then this won’t be a surprise. All the data suggests that FSD is not a safe system. No wonder no one is touching it.
Again, by comparison, Waymo is already in the process of licensing its systems with strategic partnerships with Stellantis, Jaguar Land Rover, Mercedes-Benz, and Volvo. That is impressive, considering many of them already have their own perfectly usable in-house Level 3 autonomous systems, which allow drivers to take their eyes off the road under certain circumstances. For another point of reference, FSD is still only a Level 2 system, which means the driver has to pay attention to the road at all times.
The dream of Tesla dominating this space is well and truly dead in the water. And Musk knows it.
But here is the thing: to fix FSD and deliver on what Tesla originally promised, Musk would have to admit the direction he took the project (i.e., vision-only) was wrong. And well, Musk just can’t allow that to happen. His fragile ego and pathetic brand image won’t allow it.
So, what has he done? Pivoted away from harsh reality and accountability into the safe space of wild speculation.
Last month, Musk confirmed that the future of Tesla was not EVs or Robotaxis, but humanoid robots he will sell for $20,000 each. At an investor event in Texas, Musk proclaimed that Tesla would be selling hundreds of millions or maybe even a billion a year in the near future. In September, Musk even announced that 80% of Tesla’s value and revenue would come from selling these bots.
Now, don’t forget that just a few months before this, Musk and Cathy Woods were claiming that Robotaxis would make up over 80% of Tesla’s value (and presumably, revenue). That is a hard, hard pivot!
Especially when Tesla has yet to sell a single robot or even demonstrate one doing anything remotely useful. What’s more, Tesla’s first Optimus lead, Chris Walti, who left the firm in 2022, has publicly stated that humanoid robots simply don’t make any sense. He told Business Insider that the humanoid form factor isn’t “a useful form factor”. I covered this topic in a previous article here, but basically, even the most prominent robotic experts don’t think any humanoid robot will ever be a useful or viable product.
Let’s also be pragmatic here. Musk can’t make a car that can drive itself safely. That is a relatively constrained task. The car only has two controls: speed and direction. It also has a constrained area and instructions via the road, road markings and road signs. How on Earth is he going to make a useful humanoid robot with hundreds of controls, which is expected to operate in undefined spaces with broad instructions?
The leap in technology needed to go from a successful self-driving car to a vaguely useful humanoid robot is gargantuan. There is literally zero evidence anyone can make this leap, let alone Tesla, which is now miles behind in the significantly simpler self-driving car race.
So, why? Why has Musk seemingly given up on Robotaxis and suddenly bet everything on robots?
It’s simple — he is pivoting away from reality, away from accountability. If he keeps pushing Robotaxis, people will start to ask why it is taking so long, why the Robotaxis are so much worse, and how come they are so far behind the competition. The only answer to these questions is that Musk failed. He made the wrong decision. He micromanaged the project into the ground. He is pathetic, riddled with inadequacy, and terrified of the slightest drop of accountability. On the other hand, if he admitted he made such a catastrophic mistake, the speculative investing that keeps Tesla so valuable and him so wealthy would fall away. He would lose more wealth than anyone ever has.
So, instead, he is leaning into speculation. Making it look like he is making a technological leap forward. Pushing a product that many investors don’t fully understand. He is hiding in the smoke of his grand promises, like a modern-day wizard of Oz, but with less charisma and a lot more fascism. Unfortunately, the smoke came from burning Tesla’s self-driving dreams. This is the definition of a corporation running on fumes, and when the hype runs out and reality hits, it will not be pretty.
Thanks for reading! Don’t forget to check out my YouTube channel for more from me, or Subscribe. Oh, and don’t forget to hit the share button below to get the word out!
Sources: Electrek, TechSpot, The Observer, The Driverless Digest, Wardsauto, Jaguar, KED, The Fool, Fortune, Will Lockett, Will Lockett, Will Lockett, Will Lockett, Will Lockett