Deception at Tesla's Robotaxi Event

Elon Musk's credibility is in dire straits. 💥

Hey Everyone,

I wanted to offer a brief hot take on Tesla’s recent robotaxi event.

Days before the Robotaxi reveal at Tesla on October 10th called We, Robot, the head of vehicle programs got poached to rival Google Waymo’s team. Is this a sign of things to come about the unravelling of Tesla’s robotaxi program, or worse?

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The exodus of talent at Tesla during the past summer of 2024 has been already fairly extraordinary if you have been following things closely.

Daniel Ho, Tesla’s former head of vehicle programs and new product integration is now a director at Waymo.

The flashy Tesla event revealed their Cybercab concept vehicle and said consumers would be able to buy one for a price tag under $30,000. But hang a second? Weren’t our cars supposed to become the robotaxis of the future, working on our behalf, wasn’t that the original pitch of buying a Tesla that would be part of a Robotaxi fleet? There seems to be some deception going on here.

The exodus of talent at Tesla has been fairly under-reported. Daniel Zhang, one of Tesla’s top vehicle program managers who worked under Ho, also left Tesla recently, per a LinkedIn post as noticed by TechCrunch. So what’s with all the failed promises and exits of talent at Tesla? Tesla’s so-called insurmountable first mover advantage is officially over.

The string of promises around Tesla’s product being Robotaxi ready is starting to slip away from reality. Musk said the company hopes to be producing the Cybercab before 2027, but offered no details on where the cars will be manufactured. He said consumers would be able to buy a Tesla Cybercab for a price tag under $30,000. Why would people want to buy another car?

The Years of unfulfilled promises are catching up with Elon Musk

It’s been more than a decade that we’ve been waiting for Robotaxis at Tesla, a world where GM (who are executing well) trades at a P/E of 5.5 and Tesla trades at a nearly 62. So what gives? GM is a fairly good company while Tesla keeps losing marketshare to BYD and losing market share in China and Europe.

The Cybercab looks like a rather cheap car without a steering wheel, but that’s not what we were promised. The credibility at Tesla is starting to break down at new levels.

Elon Musk said at the event he expects Tesla to have “unsupervised FSD” up and running in Texas and California next year in the company’s Model 3 and Model Y electric vehicles. It’s always been next year with this sales guy. As Elon Musk’s behavior becomes more erratic and more political with each passing year, it’s starting to impact his various businesses. What’s clear is Tesla is losing to BYD and the legion of EV makers from China.

While Nvidia’s stock has hit all-time highs closing at a record of $3.4 Trillion, the promises at Tesla have failed to deliver all of these years of waiting later. To make matters worse, the Tesla bot were obviously being controlled by humans at the We, Robot event. The Optimus humanoid robots were walking around the party in L.A., dancing, mixing drinks, and talking to guests.

There seems to be a high probability Tesla’s humanoid ventures will turn out the same as the Robotaxi project. As failed promises in the records of Elon Musk’s salesmanship for Tesla. After the ‘toothless taxi’ event, Tesla shares were down and Uber’s shares were up. Autonomous vehicle (AV) hype and evolution has been a huge disappointment and Tesla has been by far the biggest failure of the 2020s so far.

Is Uber Ahead of Tesla in the Robotaxi Concept?

While Uber is currently the world’s largest ride-sharing company, Tesla appears to be a company in decline. Sales in California for Tesla are down, as Musk has vowed to move to Texas. Tesla has experienced a significant decline in sales in California from January 2023 to October 2024. The data indicates that Tesla's sales dropped by 17% in the first half of 2024 compared to the same period in 2023, with approximately 104,000 vehicles sold in early 2024, down from 120,000 in early 2023. That’s a big drop in one of the most important regions of the world for Tesla.

Elon Musk himself actually said once about a year ago when asked about mid-term or long-term demand that they don’t have actual specific numbers, because no one really knows. Consumers are starting to think they know what Elon Musk is about.

Even the potentially good ideas at Tesla are falling apart in 2024. For instance I was sort of excited about the company’s forthcoming affordable EV, the so-called $25,000 “Model 2.” But then Reuters reported that Musk has canceled the project, preferring to sink the company’s resources into a fully autonomous robotaxi. It appears Elon Musk realized he can’t compete with China EVs on price.

Acquiring Twitter was a bad idea if your marketing consists of your personal brand. The days of Elon Musk spinning believable visions of the future are long over. That Tesla employees were stationed remotely to oversee many (if not all) of the interactions between the bots and attendees during the “We, Robot” event doesn’t exactly inspire confidence.

FSD, which stands for Full Self-Driving, is Tesla’s premium driver assistance system, available today in a “supervised” version for Tesla electric vehicles has been a major disappointment and has led to a surprising number of accidents in the last few years. In a recent evaluation, Tesla's Autopilot system was associated with at least 467 collisions, including 13 fatalities, highlighting a 'critical safety gap' in its functionality, according to a Federal regulator. The dangers of Tesla’s FSD has likely put the U.S. behind China in AV adoption and roll-outs to more cities and regions.

In addition to the Cybercab, Musk also announced plans to produce an autonomous, electric Robovan that can carry up to 20 people, or be used to transport goods. But the name Robovan is the literal name of the product of WeRide, a company that Uber is working with on AVs. He literally stole the name from a competitor. WeRide unveiled its own Robovan back in 2021. An unfortunate coincidence? I think not.

Hilariously Uber’s partnership with WeRide looks pretty serious. The deal means the partnership between WeRide and Uber is expected to launch first in Abu Dhabi later this year. Meanwhile Waymo vehicles joined the Uber app in Phoenix in October 2023. Consumers and investors were clearly lied to regarding Tesla’s vision of the Robotaxi.

How is Tesla planning to bounce back and counteract the results of the first half of the year? The promises have piled up and Tesla’s best years are likely behind it. You cannot recover from this.

Tesla’s entire high-octane thesis has fallen apart. Elon Musk did not provide verifiable evidence of progress toward L3 autonomous technology, which makes it difficult to assess feasibility of the Tesla’s dream promise of Robotaxis. There’s literally no precedent for achieving higher levels of autonomy using a vision-only approach (instead of a sensor-fusion approach) and Elon Musk has been lying about this likely all along.

At least one video from the We, Robot event displayed an Optimus bartender acknowledging that it was being “assisted by a human.” The entire idea of Tesla was that it was supposed to be a leader in autonomous vehicles and robots. This turns out likely to no longer be feasible and it’s losing marketshare in the actual industry where it operates, making good EV cars consumers want.

At this point I have more trust in unprofitable Rivian, than I do in Tesla to make good and real products. I have lost faith in Elon Musk, what he has done to Twitter and the public discourse is harming the future of the United States. Tesla’s Robotaxi deception will go down as one of the biggest frauds in the history of corporate America.