After swiftly denying a report that Tesla would be dropping plans for a $25,000 electric vehicle, CEO Elon Musk made his latest promise to investors and fans — a self-driving Tesla would be unveiled on August 8.
The announcement came as Tesla shares were sinking in the wake of a Reuters report of the abandonment of Musk’s long-promised affordable EV in favor of going all-in on the similarly long-promised robotaxi. Tesla shares have been on the decline since Jan. 1, falling as much as 33% year-to-date and marking Tesla as the worst performer in the S&P 500.
About an hour after the market closed, Musk made his robotaxi announcement, driving shares up in after-market trading. Tesla stock climbed almost 5% in trading Monday.
It’s a tried-and-true playbook for Musk, who has frequently promised new technology and vehicles, only for products to actually materialize on the market years later.
“We see a Robotaxi unveiling on August 8 as more aspirational, akin to Tesla’s Semi and Roadster announcements — and not likely to be Tesla’s next model,” Bernstein analysts wrote Monday.
The Cybertruck electric pickup was first revealed in November 2019 with production scheduled for 2021, although its first model wouldn’t be made until 2023. A second-generation Roadster sports car was unveiled in 2017 and expected to join the market in 2021. Now, Musk aims to showcase a prototype for the model by the end of 2024, with production scheduled for 2025.
The CEO has been promising Tesla EVs will be able to operate completely independently of a driver for about a decade through the company’s driver assistance software, Full Self-Driving (FSD). Tesla recently updated its software out of the “Beta” stage, although it still reminds drivers to “not become complacent” and their cars are not fully autonomous. A national auto safety nonprofit said last month that a prior version of the software flunked its tests.
“The 2 main robotaxi companies operating driverlessly in the US are doing so in limited geo-fenced areas, with relatively small fleets of particularly expensive vehicles carrying considerable amount of hardware,” Deutsche Bank analysts wrote Monday. “The fact that Mr. Musk announced an unveiling of robotaxi for Aug 8 in no way means the technology is ready.”
Driverless vehicles are allowed anywhere on the road in the U.S., except for where states specifically say they are prohibited. Just 10 states, including California and New York, have limits on self-driving vehicles, while 20 specifically allow driverless operations.
Leading companies with robotaxis on the market, such as Google’s Waymo and Mobileye, keep their self-driving vehicles confined to specific cities. Cruise, a General Motors subsidiary once projected to generate $50 billion annually by 2030 before a slew of controversies, is looking to stage a comeback in Texas.
In 2016, Musk wrote that receiving widespread approval from regulators would require 6 billion miles of FSD data. On Friday, roughly 2 hours after Musk’s robotaxi announcement, Tesla said it had recorded 1 billion miles driven using FSD, with a large spike beginning in September 2023. The company slashed FSD’s price to $12,000 from $15,000 on Sept 1 to drive up adoption from customers.
“[I]nvestors will not get excited about the 8/8 robotaxi unveil until TSLA can provide assurance FSD will be 99.99% intervention free, and that TSLA is prepared to assume liability for injury or damages to appease regulators tasked with granting robotaxi licenses,” said Gary Black, managing partner at The Future Fund, on X Monday.
Tesla reports its first-quarter earnings on April 23. Musk is expected to provide further information about his robotaxi plans and the $25,000 EV.