Tesla CEO Elon Musk pulled up to a stage on the Warner Brothers lot in Burbank, California, Thursday night in a futuristic-looking vehicle that reflects his vision for turning the EV maker into an AI and robotics company.
Musk laid out a scenario in which individual owners—or “shepherds,” as he called them—would amass their own “flocks” of robotaxis called “Cybercabs,” which they’d make money on by offering paid rides to passengers.
“I think the cost of autonomous transport will be so low,” Musk said, “that you can think of it like individualized mass transit.”
But Tesla’s stock was down following the event, and Musk’s presentation generated some skepticism about the plan’s technology, timeline, and business model.
“This doesn’t make a whole lot of sense to me,” Edwin Olson, CEO of AV company May Mobility, told Tech Brew of Musk’s robotaxi business model. “If you’ve got autonomous vehicles and they are cash-printing machines, because you can just turn them loose and they make money, then finding equity or investors to finance these vehicles shouldn’t be hard. Why do you need individual ‘shepherds’ going and buying 10 vehicles at a time?”
“We also think that, at least for now, fleet-operated vehicles are the best way to deliver this technology into the world,” he added. “Personal car owners don’t want to wake up and realize that someone threw up in the backseat of their car.”
At the “We, Robot” event, Musk unveiled a Cybercab prototype with no steering wheel or pedals. He said that Tesla expects to offer the vehicle at a price below $30,000 and for the operating cost to be around 20 cents a mile.
Paul Miller, VP principal analyst at Forrester, expressed skepticism about the price target in an email via PR rep Hannah Segvich: “Without external subsidies, or Tesla making a loss on every vehicle, it doesn’t seem plausible to launch at anything close to that price this decade.”
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Musk said that the Cybercab should be in production “in 2026—before 2027, let me put it that way.” The Tesla leader is notorious for declaring overly ambitious timelines for product launches that ultimately end up getting delayed.
He also said he expects “fully autonomous, unsupervised FSD in Texas and California next year,” referring to Full Self-Driving, Tesla’s driver assistance software that, despite its name, does not enable fully autonomous driving.
And in a surprise, Musk revealed a product called the “Robovan,” a larger autonomous vehicle he said could transport goods or up to 20 people.
Musk has claimed that Tesla’s foray into AI and robotics could boost the company’s value to as much as $30 trillion. He’s attempting to make this pivot as Tesla, and the EV sector broadly, faces a slowdown in EV demand.
Ahead of the unveiling, industry stakeholders were eager to learn if Tesla would switch up its controversial camera-only approach to vehicle autonomy. Tesla’s AV system uses cameras and end-to-end machine learning; other companies employ backup sensors.
“Anytime someone’s talking about their advantage being that [their vehicles] drive millions and millions of miles, [it] tells you that their technology approach is based on essentially memorizing how to drive. And that’s not a scalable approach,” Olson said. “The car has to be able to imagine what’s going to happen next, even in a situation it’s never seen before.”
Some pointed out that in order for Tesla’s vision to become reality, regulators and the public have to get behind the technology.
Many consumers, Jessica Caldwell, Edmunds’ head of insights, said in a statement via PR rep Talia James-Armand, “are likely wary of being forced to unwillingly participate in the science experiment of fully autonomous driving on their roads.”