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There is no denying that Tesla has a huge focus on… (Tesla) The Q2 2024 earnings call on July 23 wasn’t about the company’s electric vehicles like the Model 3, Model Y or Cybertruck, but rather its ambitious efforts toward artificial intelligence and self-driving vehicles, particularly Robotaxis.
“The value of Tesla is largely in autonomy,” Tesla CEO Elon Musk said during the earnings call. “Everything else is noise compared to autonomy.”
Musk and Tesla may have a grand vision for robotaxi, but they have some relatively tough competition to overcome.
Musk’s amazing robot taxi
On the call, Musk acknowledged that the unveiling of the robotaxi product had been delayed from August 8 to October 10, noting that the extra time would allow Tesla to make “some significant changes” to the vehicle’s design, as well as give the company a chance to “show off a few other things,” which Musk did not elaborate on.
Canaccord Genuity analyst George Gianarikas asked Musk about GM. (General Motors) resolution Cruise Origin production stoppedIt is a self-driving bus-like vehicle without pedals or steering wheels.
In a letter accompanying the company’s earnings call this week, CEO Mary Barra suggested that modifying a more traditional vehicle like the upcoming Chevrolet Bolt EUV would be easier to pass over government regulators and cheaper to manufacture.
“This addresses the regulatory uncertainty we faced with Origin due to its unique design. Additionally, unit costs will be much lower, which will help Cruise optimize its resources.”
Although the design of the upcoming robotaxi is still under wraps, many believe that Tesla vehicles will not have pedals or steering wheels to control the vehicle, which could put Musk’s company in a regulatory nightmare.
However, in his usual fashion, Musk downplayed the issue and criticized his competitors.
“The real reason they canceled the project is obviously because GM couldn’t do it, not because of regulators, they blame regulators,” Musk said during the earnings call.
“It’s misleading for them, because Waymo is doing well in those markets. So the technology they’re using is not up to par.”
More electric car work:
- Porsche and Mercedes diverge at electric vehicle crossroads
- Fisker-type problem hits automaker known for quality
- A police officer stops a Waymo robotaxi, and no driver or passengers greet him.
Another analyst, Pierre Ferragu of New Street Research, asked Musk about the scalability of his robotaxi project, which prompted another creative and open response from the prominent figure.
Musk referred to a “network” of Tesla vehicles in the range of “over 10 million, over 20 million vehicles” operating 24/7 and running on a unique architecture.
“If you can think of the Tesla driving fleet as a giant Airbnb fleet — Airbnb on wheels,” Musk said.
“I mean, in addition to that, we’re going to make a number of cars for Tesla that will be owned solely by Tesla and will be added to the fleet. I think this will be more like Uber. But it will all be Tesla’s network.”
In a note published early on July 24, the day after the earnings call, New Street downgraded Tesla from “buy” to “neutral.”
Competition is good.
Musk’s comment and explanation of his vision for a robotaxi comes at a time of heavy investment in what will eventually become Tesla’s direct competitor.
Although GM disclosed it lost $458 million on Cruise in the last quarter, the automaker announced last month that it was pumping $850 million into the business as part of its ongoing commitment.
GM’s CFO said the massive sum was to be used to cover Cruise’s operating costs as it resumes testing of its self-driving vehicles, following a major pedestrian accident in San Francisco in October 2023.
But while halting development of the Cruise Origin is also expected to save the GM-adjacent company a significant amount of money, the idea isn’t popular with everyone.
Former Cruise CEO Kyle Vogt, who resigned in the wake of the October 2023 crash, criticized GM on social media, saying it “would have been great for cities.”
I’m disappointed to see GM kill Origin. This could have been great for cities.
Time and time again GM finds itself 5-10 years ahead, but fails to get the ball rolling, things stall, and they lose the lead. Does anyone remember the EV1?
It’s as if someone is constantly letting them look at… pic.twitter.com/GDlL4KQk4S
– Kyle Vogt (@kvogt) July 23, 2024
“General Motors has repeatedly found itself 5-10 years ahead, but then fumbles the ball, shuts things down, and loses the lead,” he wrote on X (formerly Twitter). “Does anyone remember? [GM] “EV1? It’s like someone keeps letting them look into a crystal ball and then they say, ‘No, we’re fine.’”
On July 23, Alphabet Inc., the parent company of Google, announced, (Google) Google has announced a multi-year $5 billion investment in its self-driving subsidiary, Waymo.
The investment comes as Waymo plans to expand its robotaxi coverage and presence in San Francisco, Los Angeles and Austin, Texas.
“This is aligned with enabling Waymo to build the world’s leading self-driving technology,” Alphabet CFO Ruth Porritt said during an earnings call on July 23.
Shares of Tesla Inc., which trades on the Nasdaq as TSLA, are down 10.7% since the closing bell, trading at $220.02 at the time of writing.
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