On Thursday, October 10, 2024, Tesla held its highly anticipated “We, Robot” event at the Warner Bros. film studio lot in Burbank, California. The event, which had been the subject of speculation for months, finally unveiled Tesla’s vision for the future of autonomous transportation and robotics.
CEO Elon Musk took centre stage to present the company’s latest innovations, including the long-awaited robotaxi, a new autonomous van, and updates on the Optimus humanoid robot.
THE CYBERCAB (OR IS IT ROBOTAXI?)
The star of the show was the expected Cybercab, Tesla’s fully autonomous robotaxi. Key features of the Cybercab include:
– Two doors and two forward facing seats
– Four-wheel design
– Front and rear light bars, similar to the Cybertruck
– No rear or top glass
– Butterfly doors
– Large centre screen
– No steering wheel or pedals
Musk emphasized the safety and cost-effectiveness of the Cybercab, stating, “Autonomous vehicles will be 10 times safer than human drivers.” He also highlighted the economic benefits, projecting that the Cybercab would cost around $0.20 per mile to operate, or $0.40 after taxes and fees.
One of the most surprising announcements was the Cybercab’s projected price point. Musk said, “The Cybercab will cost below $30,000 USD,” making it potentially accessible to a wide range of consumers and fleet operators.
– Cybercab production is set to begin before 2027
– The vehicle will be available for purchase to private individuals
– Tesla plans to implement fleet management software
Musk seemed confused as to what to call it, flipping between the Cybercab name but then reverting to ‘robotaxi’ which has been his go-to term for several years.
ROBOVAN: THE UNEXPECTED ANNOUNCEMENT
In an unexpected move, Tesla also unveiled the RoboVan, a larger autonomous vehicle designed for mass transit and goods transportation.
Key features of the RoboVan include:
– Capacity for up to 20 people
– Adaptable for goods transport
– Cyber-inspired aesthetic
– No front window
– Large glass sliding doors on the sides
– Potential for school bus or RV adaptations
– Possible personal use version with steering wheel and pedals
Musk emphasized the versatility of the RoboVan, stating, “We’re going to make this, and it’s going to look like that.” He added, “One of the things we want to do – and we’ve done this with the Cybertruck – is we want to change the look of the roads. The future should look like the future.”
OPTIMUS: THE HUMANOID ROBOT
Tesla also provided updates on its Optimus humanoid robot project. Attendees were treated to demonstrations of Optimus robots walking alongside employees and interacting with guests.
As people were keen to point out, none of the robots were operating autonomously, but either mimicking the walking and movements of the handlers next to them, moving exactly in step with them. And the robot bartenders which were handing out drinks were being controlled, behind the curtain, again by operators in charge of both movement and the synthesised voices.
REACTION
Before we talk more about the production, timeline and regulatory challenges let’s look at some of the reaction.
Certainly. Here are some reactions and quotes from significant figures in the electric vehicle industry and investment community regarding Tesla’s “We, Robot” event:
Dan Ives, Wedbush Securities analyst and well-known Tesla bull:
“That will naturally weigh on shares this morning as a knee jerk reaction. That said, we strongly disagree with the notion that last night was a disappointment as we would argue the opposite seeing Cybercab with our own eyes and the massive improvements in Optimus which we interacted with throughout the evening.”
Toni Sacconaghi, Bernstein analyst:
“Overall, we found Tesla’s Robotaxi event to be underwhelming and stunningly absent on detail.” Sacconaghi also noted the lack of information on “regulatory approval for robotaxis, whether FSD could be retrofitted to Tesla’s existing EV installed base, safety protocols, and centralized monitoring of a robotaxi fleet.”
Adam Jonas, Morgan Stanley analyst:
“As we approached what could have been the most anticipated product reveal in Tesla’s history, we had various expectations about what the market might learn from the presentation, which we believed were critical to the stock’s trajectory. Ultimately, we were disappointed by the depth and detail of the presentation.”
John Murphy, Bank of America analyst:
Murphy was more positive, stating that the presentation “met expectations.” He appreciated “the timelines provided, including the 2026 production target for the Cybercab (which he viewed as ‘optimistic’), the potential $30,000 starting price, and plans for unsupervised FSD testing in Texas and California next year.”
Gary Black, Future Fund LLC managing partner and Tesla investor:
“$TSLA ‘We, Robot’ was long on promise and short on specifics and for us, was largely as expected. TSLA did not unveil a $25-$30K compact, but did reveal a 20-person autonomous Art Deco bus. The event didn’t address how Tesla will make the leap from selling supervised FSD to unsupervised autonomous vehicles.”
Wells Fargo analysts:
“The Cybercab demos were conducted on a movie set in a well-controlled environment, and were very similar to a slow & short amusement park ride. Waymo is now hosting 100K rides per week in major cities, so we expected more from TSLA’s demo.”
Seth Goldstein, Morningstar equity strategist:
“Tesla is banking it can overtake companies like Alphabet-owned Waymo, which is already on roads, because of its vision to deliver a vehicle with a much cheaper price point that is not confined to a geofenced area.”
Whilst the usual suspects, whose colours were already nailed to the mast, praised the vision, overall analysts and investors expresed disappointment over the lack of specific details and timelines.
TESLA’S AUTONOMOUS VISION AND THE TESLA NETWORK
Throughout the event, Musk outlined Tesla’s broader vision for autonomous transportation. He emphasized the company’s commitment to a vision-only approach for self-driving technology, stating that there was “no need for radar or lidar” in the Cybercab. In the past he has disagreed with himself arguing for high definition radar, but tonight the vision-only approach was favoured.
The Tesla Network, a proposed autonomous ride-hailing service, was also discussed. Musk explained that the network would allow Tesla owners to contribute their autonomous vehicles to a robotaxi fleet when not in use. This concept aims to create a decentralized transportation system with the private owners taking on the capital outlay of buying and financing the vehicles, and presumably insuring them, but sharing any revenue with Tesla. It also provides tesla with a way to generate recurring revenue without having a fleet of vehicles on their books if they can persuade individuals to take on all the liability.
PRODUCTION AND TIMELINE CHALLENGES
Despite the ambitious announcements, Musk provided no details on production plans and timelines. He did not outline specific plans for building new production facilities or retooling existing ones to accommodate the Cybercab or RoboVan.
Tesla’s previously stated goal of producing 20 million vehicles per year by 2030 would require a significant increase in production capacity, as it represents about 15 times the company’s 2022 output. The annual production and delivery numbers at Tesla will almost certainly be down this year compared to 2023, in a first for the company which has never seen an annual decline.
MARKET REACTION
The market’s initial reaction to the “We, Robot” event was mixed. Tesla’s stock price saw a decline following the event, while shares of ride-sharing companies Uber and Lyft experienced modest gains.
Some investors expressed concern about Tesla’s shift away from its core business of manufacturing and selling electric vehicles towards a focus on robotics and artificial intelligence. The company’s high market capitalization, which rivals that of many other automakers combined, has long been justified by Musk’s promises of revolutionary autonomous technology.
REGULATORY CHALLENGES AND SAFETY CONCERNS
The regulatory landscape for autonomous vehicles (AVs) varies significantly across the globe, with different countries adopting diverse approaches to accommodate this emerging technology. At the core of these regulations is the Society of Automotive Engineers’ (SAE) classification system, which defines six levels of driving automation, from Level 0 (no automation) to Level 5 (full automation).
The SAE levels are as follows:
– Level 0: No Automation
– Level 1: Driver Assistance
– Level 2: Partial Automation
– Level 3: Conditional Automation
– Level 4: High Automation
– Level 5: Full Automation
In the United States, regulation of AVs is primarily handled at the state level, with some federal guidance. As of 2024, multiple states have passed legislation allowing for the testing and operation of autonomous vehicles on public roads. However, a comprehensive federal regulatory structure has yet to emerge, despite attempts such as the “SELF DRIVE Act” in 2017.
Other countries have taken different approaches. For instance, Japan amended its Road Traffic Act and Road Transport Vehicle Act in 2020 to allow Level 3 self-driving cars on public roads. The United Kingdom passed the Automated and Electric Vehicles Act in 2018, establishing a framework for liability between insurers, owners, and operators of automated vehicles.
Several companies are at the forefront of AV development and deployment:
Waymo, a subsidiary of Alphabet Inc., has been a pioneer in the field. They operate a commercial robotaxi service in Phoenix, Arizona, and have expanded testing to other cities. Waymo’s vehicles are considered to be at Level 4 automation, capable of fully autonomous operation within specific geographic areas.
Cruise, owned by General Motors, has also made significant strides in AV technology. They launched a commercial robotaxi service in San Francisco in 2022. However, Cruise faced setbacks in late 2023 when their permit to operate in California was suspended following safety incidents.
Uber, while initially pursuing its own AV technology, sold its self-driving unit to Aurora Innovation in 2020. The company now focuses on partnering with AV companies to integrate autonomous vehicles into its ride-hailing platform.
Tesla’s approach to autonomy differs from these companies. Tesla’s Autopilot and Full Self-Driving (FSD) systems are Level 2 automation, requiring constant driver supervision. However, Tesla aims to achieve higher levels of autonomy through over-the-air software updates and machine learning based on data collected from its large fleet of vehicles.
Tesla’s system relies primarily on cameras and neural networks, eschewing lidar technology used by many competitors. This approach has been controversial, with some experts questioning its safety and effectiveness.
Regulatory challenges have impacted all these companies to varying degrees. Waymo and Cruise have faced scrutiny from regulators, particularly following incidents involving their vehicles. Tesla’s Autopilot system has been the subject of multiple investigations by the National Highway Traffic Safety Administration (NHTSA) in the United States.
The European Union is developing a comprehensive regulatory framework for AVs, while China has set ambitious goals for AV adoption as part of its “Made in China 2025” initiative.
As the technology progresses, regulators face the challenge of creating frameworks that ensure safety while allowing for innovation. Key issues include liability in accidents involving AVs, data privacy, cybersecurity, and the impact on employment in transportation sectors.
The success of AV companies will depend not only on technological advancements but also on their ability to navigate this complex and evolving regulatory landscape.
One factor not addressed by Tesla is the lack of data from themselves regarding disengagements and failure rates per mile. Until Tesla is more open about their own data, third parties have been publishing their own research using the publicly available Tesla FSD (Supervised) software.
Were Tesla to ever launch a robotaxi or AV, they would also have to comply with the stringent regulations wherever they operate, which they’ve largely avoided by keeping their current technology at the level of merely assisting human drivers.
FUTURE OF TRANSPORTATION AND URBAN PLANNING
Tesla’s vision for autonomous vehicles could have far-reaching effects on urban planning and transportation infrastructure. The widespread adoption of robotaxis and autonomous vans could reduce the need for personal vehicle ownership, potentially alleviating traffic congestion and parking issues in urban areas.
China has a very strong long distance train network, whilst in Europe many public mass transit systems such as buses and trains are far from perfect, do work well and many people don’t see the need for a fleet of autonomous electric cars.
ENVIRONMENTAL IMPACT
While not explicitly discussed during the event, the shift towards autonomous electric vehicles aligns with Tesla’s mission to accelerate the world’s transition to sustainable energy. The potential for more efficient transportation systems could contribute to reduced emissions and energy consumption.
However there is a case to be made not for point-to-point transport for individuals, requiring an intensive resource draw on the planet.
CONCLUSION
Tesla’s “We, Robot” event provided a glimpse into the company’s vision for an autonomous future. The unveiling of the Cybercab and RoboVan, along with updates on the Optimus robot, demonstrated Tesla’s ambition to revolutionize multiple aspects of transportation and robotics.
However, the event also raised questions about production timelines, regulatory challenges, and the company’s ability to deliver on its ambitious promises. As Tesla moves forward with its plans, the coming years will be crucial in determining whether Elon Musk’s vision for a fully autonomous future can become a reality.
If you ask the CEO or the faithful fans they’d say “We, Robot” marks a milestone in Tesla’s journey, but it also sets the stage for intense competition, increased scrutiny on safety which the company has been reluctant in recent years to divulge, and technological challenges. One reaction I saw today that this event now meant that “all eyes will be on Tesla” but on reflection, maybe another speech from the CEO heavy on bluff and bluster but light on detail had the opposite effect. The claims were so vague and reminiscent of previous unfulfilled promises, this was another example of the boy who cried wolf. With no demonstration of their ability, just a very slow speed few runs on a tightly controlled, closed course on private land, many of us left feeling we learned very little. Apart from Elon Musk sticking to his gameplan of effectively saying “trust me”. Many people are now looking at Tesla and saying it’s now time to “show me”.