Waymo’s driverless robotaxis are now offering customers rides on Austin-area freeways.
… Austin joins Phoenix, San Francisco, Los Angeles and Miami on the growing list of cities in which Waymo vehicles travel on highways.
…
A Waymo representative said the service is active on all freeways in the company’s Austin service area, including Interstate 35, MoPac Expressway, U.S. 183 and U.S. 290.
Aspiring competitor Tesla provides autonomous freeway service in these markets:
.
Tesla provides for consumer use a highly effective (supervised) FSD. Although difficult to know its net benefit, it may be saving countless lives and helping 1.48 million subscribers avoid injury because of driver error, poor reaction times, and or even impaired operation.
It’s not full autonomy but it is making a difference.
I think you miss the point. Some have narrowed down Tesla’s success or failure as a comparison to Waymo. I think that’s the wrong way to view it. There are practical safety measures achieved with Supervised FSD that may be incredibly valuable but fall short of driverless capabilities. While Waymo has the lead in autonomous driving, Tesla is delivering practical and cost effective driver assist services that are more valuable in their reach.
I’ve been a shareholder for much longer and never tied my expectations to the success or failure of the robotaxi. I make these investments with the intent to hold in perpetuity. There are often long stretches where nothing seems to be happening. Are you a shareholder?
What Tesla has achieved is remarkable and the valuation and expectations are even higher. But, the day to day comparison of where Waymo is vs Tesla is of little value. They either solve for the last mile, which opens up a world of possibilities or they don’t. Even then, it’s difficult to say what the margins might look like for robotaxi services. In the interim, the advances in FSD are adding to driver safety at a price point that has broader reach and unlike any other car manufacturer. I think it’s worth noting rather than simply grading Tesla as a pass fail based on a comparison to Waymo.
Yes, we have read that a few times, so posting on robotaxis in this thread seems like a waste of your time.
And, for my part, I don’t have much interest in story or narrative stock tales about Tesla.
Heard them for years.
I’m in interested in new and specific, data-based facts about technical progress in machine learning or financials related to machine learning.
I am posting those facts here and other places.
I also have an interest in specific, measurable, time-bound predictions of machine learning and related financials, which I have also posted many times:
I have little interest in non-factual and non-specific beliefs and opinions on Tesla’s value or future.
Already heard them, looking for real results, not stories about hopes and dreams.
At the risk of derailing the thread - I am very curious why you would continue to be a shareholder if you don’t have some confidence that Tesla will be able to make the robotaxi and autonomy work.
Tesla has all-but-abandoned any efforts to materially grow their automotive division outside of the autonomy ventures. They’re losing market share in BESS - and while that sector might grow somewhat over time, it’s not going to materially contribute much to the valuation of the company. Solar is not going to contribute much, either. So basically the future prospects of the company’s current businesses come down to autonomy and Optimus. And if they can’t solve autonomy with their approach to “embodied AI,” it becomes exceedingly unlikely that Optimus is going to be a viable product line, either - since their Optimus program is ostensibly based on the FSD AI work they’ve done.
As Musk himself famously put it back in the day, “The overwhelming focus is on solving full self-driving. That’s essential. It’s really the difference between Tesla being worth a lot of money or worth basically zero.”
Now - I completely understand the idea that one might invest in Musk (as a visionary allocator of capital that can identify the next big opportunity to enter) or the corporate entity (same). We’ve talked about it. I understand in theory that one might be indifferent to whether any of Tesla’s current businesses can make TSLA a good investment, on the grounds that Telsa can and will move to another opportunity sometime down the line.
But does that still actually work in a world where SPCX exists? Musk now has a second big public conglomerate company with ready access to massive capital inflows. The Next Big Thing for the Musk, Inc. family of products isn’t likely to be housed in the TSLA entity, but in the SPCX entity. Musk has a bigger ownership share and more corporate control of SPCX than Tesla, and Starlink already generates more operating income than Tesla. It seems extremely unlikely that the next thing that happens in the Musk Extended Universe (after a long stretch of nothing seeming to be happening) would be in the TSLA basket, rather than the SPCX basket. That second company provides some protection on the downside (a “SPCX Put” on TSLA), but it all-but-eliminates the upside for any future ventures.
It sure seems to me that failure in Robotaxi is completely incompatible with holding a long position in Tesla.
I have no interest in convincing you otherwise. What I am pointing out is there are consumer benefits and revenue opportunities to FSD, as is that Waymo cannot deliver. Although true that Tesla has zero fully autonomous vehicles operating on freeways, it has 1.48 million and growing that are providing data, safety features and additional revenue via its supervised version that can operate on highways.
It depends on how much weight you put in Elon Musk’s comments about the driverless future. He’s said a number of times in different ways that vehicles with driver controls are “pointless” and after the Roadster, Tesla does not plan to produce cars with driver controls. There are a couple different versions of this story out there, but Tesla was supposed to produce a “Model 2” that was an affordable mass-market vehicle. That was canceled in favor of the Cybercab. So Tesla really does seem to be betting that FSD will be more than just a driver assist system.
You are correct that FSD provides a source of high margin recurring revenue. But that raises a different problem: You have to sell cars to sell the subscriptions. Tesla is down to two mass market consumer vehicles and according to them will produce no new vehicles with driver controls. But their sales seem to be stuck at about 1.8 million units a year between their two consumer models. To put it another way, they can’t grow FSD subscriptions very fast unless the car business also grows fast.
So FSD really does need to provide an autonomous solution beyond driver’s assist. Musk has pretty much bet the company on it.
I’m optimistic but I don’t have any certainty. My original purchase thesis was tied to Ron Baron’s estimates of the existing business and some optimistic assumptions about EV sales by 2030. Admittedly, those numbers seem unlikely in the current market.
I think there is a fundamental problem in the EV market, at least in the US, that has to do with range, price, and charging limitations. I don’t know if these are permanent or temporary problems. I think longer term EV sales do start to dominate. Autonomous driving capabilities may help Tesla assert some kind of moat. But, I suspect battery range at the right price may be more critical. I’m disappointed that Musk thinks the current range is sufficient. It may be in other countries but not in the US, with the Average Americans use expectation.
He may be right. I could see EV’s as highly commoditized in the long run. But, I also view Tesla as a best in class manufacturer capable at competing at margins better than most competitors. I suspect the auto industry may get weeded out over the longer term.
I’m not sure but with EV sales dipping and the cash flow going negative, it does put more pressure on Musk to deliver on robotaxi. I continue to view autonomy as two different thresholds. 1) full robotaxi capability 2) a slightly less robust version that still dramatically improves driver safety that the public may be willing to purchase.
Again, I’m not trying to convince anyone at this moment to buy shares. For me, I am slow to sell and even willing to be late to sell. I need to see what Tesla develops in terms of capable autonomy and then what does it mean in terms of margins. I would acknowledge that for new purchasers of shares this is shading towards speculating vs investing.
What I do think is immaterial is the day to day scorekeeping on Waymo vs Tesla. If Tesla’s approach work, it effectively may work everywhere. Although there may be some advantages to earlier regulatory approval and established physical presence, if the margins are better, I think Tesla catches up quickly and then potentially overtakes.
I think the model 2 was cancelled for several reasons. One of which was the robotaxi may provide a better margin than a low price EV. I think Tesla has ambitious plans for FSD for both private vehicle use and full autonomous transport services.
This does represent a change in the thesis. I’m not completely convinced these will be the last models with driver controls.
If you are correct in your assumption, it would mean a large concentrated bet on FSD. However, I’m not convinced these are the last models with hand controls.
Right - the 50% CAGR leading up to 20 million unit sales by 2030, which Tesla itself used to describe as their target. That’s more than unlikely. Not only is it impossible after three years of no growth (Tesla’s expected to sell the same number of cars this year as 2023), but that’s no longer Tesla’s business plan. Not only are they not planning any new models, they’ve discontinued two of the ones they had - including their larger SUV, withdrawing from one of the larger segments of the light vehicle market.
As Musk said, “We should be thought of as an AI robotics company. If you value Tesla as just an auto company—it’s just the wrong framework. If you ask the wrong question, then the right answer is impossible.”
They’re not a car company any more, and they have no plans - and have demonstrated no interest - in making any efforts to materially capture any more of the non-autonomous light vehicle market. They’ve got the 3 and the Y, and maybe the Roadster as a holdover halo/vanity vehicle. But that’s it, and that’s all they’re going to do, unless and until they solve autonomy.
But the scorekeeping against Waymo is how we assess whether Tesla’s approach works. Tesla’s business case was that by eschewing additional sensor equipment and hi-def mapping, they could scale into widespread autonomy in ways their competitors could not. These comparisons show that this business case is incorrect. Waymo is scaling much faster than Tesla, and Tesla is hardly scaling at all. Tesla’s approach hasn’t been working, and Waymo’s has.
This is important not just in assessing Tesla’s capabilities. It also poses serious problems for Tesla as a competitor. As noted upthread, Tesla famously eschews advertising - it relies on free media and unpaid ways of driving customer awareness. But if Tesla isn’t the first to enter a market, it loses a lot of that. All those local news stories about “Will your next taxi ride be with a robot? Find out on Tri-State Action News at 11:00, after the game!” end up covering Waymo, not Tesla - and when Tesla rolls in, it’s just not news any more. And even if Tesla does one day end up with a technology that can scale faster than Waymo has been scaling, it’s useless to them if Waymo has already fully scaled.
That’s the first of the two “ticking clocks” Tesla faces for their robotaxi business. The second is their questionable decision to start manufacturing Cybercabs before they have sufficiently advanced software to make those vehicles usable. That creates a serious financial problem unless they find a way to get those vehicles in operation soon. Making thousands of vehicles at more than $30,000 a piece that don’t do anything is going to eat a nontrivial chunk of their FCF/earnings.
They gambled that their tech would be advanced enough that they’d have a place to meaningfully deploy those cars in the immediate future. Not in three or five years - that they’d be capable of entering service now, because now is when the production ramp is starting and they’re going to be making hundreds of millions of dollars of these Cybercabs.
So yes - there’s a lot to be learned from looking at the very near term prospects of Tesla’s AI driver capabilities.
I don’t know about you but, as is often said, my crystal ball is broken. I think it is an incorrect statement to say that Tesla is no longer a car company. It is number 2 in the world in terms of EV production. In addition, it has the largest network of superchargers. Further, it has just rolled out its semi production line.
There is a larger transformation going on within the company and rather than viewing it as an abandonment of EV manufacturing, it is likely to remain as part of an overall mission. These remain challenging times for EV Sales.
Interest rates are high making an already above avg cost of purchase higher
Range, Charging times and other factors are turning off US interest. Something like less than 20% of US buyers are even considering an EV.
The used market is challenging as customers wrestle with battery degradation and remaining useful life.
Autonomy is important and you are correct that it is a focus. Tesla has limited capital and I think the intent is to there to help improve margins and add another critical revenue stream. Unlike traditional car companies that try to sell their way out of trouble, Musk and Team have no problem throttling back lines of production that may represent little in the way of profitable cash flow. In addition, the S and X were very expensive vehicles with a limited a market. I don’t take these decisions as a permanent to abandonment future models but an adjustment of current priorities. If your takeaway is to short the stock or to hold off to buy until or if autonomy is achieved, I can’t argue with the logic of it.
I would make this analogy. You and I are in a race across the country. You’re in a vehicle that is reliable but slow and now has a 100 mile head start. I’m still trying to get mine started in the driveway but it is way faster and has to make less stops if it works. Our current positions in the race may not matter in the end. If Tesla solves autonomy and with it a substantially less expensive and quicker path to rolling it out and maintaining it, the current lead that WAYMO has may not matter longer term.
The blackberry was the most popular handheld with a massive following, entrenched customer base, until it wasn’t. The problem with a taxi service is there is almost nothing sticky about consumer relationship other than price, convenience, and safety.
In this day and age, if you build it and deliver value, the customers will come. There is no shortage of interest in Tesla, both in terms of positive and negative coverage. In my mind, first to market means little with the exception of where there may be scarcity in very densely populated areas and limited grid capacity that may only accommodate 1 player. The bigger challenge is actually probably the regulatory hurdles, which are intended to protect the current human driver based system.
I am keeping an eye on FCF, which has already turned negative. What is unique about Tesla is the relationship to Space X. There is I believe a critical and unique marriage of the Agentic and Physical AI developmental work. I could see Tesla getting folded into Space X, if the share price plummeted. I think that puts a floor of the value, in theory.
I don’t believe Tesla would simply continue to manufacture vehicles at scale, if they have no near term expected use. Musk is pretty militant about spending waste. This is one of the unique features of Tesla, even as a large company. It is not hesitant about changing direction when needed.
You raise what are all fair concerns and I’m not adding to my position at these levels, without further confirmation. I’m also no selling or panicking about the current direction. Likely, if the stock corrects meaningfully, I’ll do what I have traditionally done, which is add further tranches. Like I said, this is a business at the forefront of some key new and important sectors and I plan to have capital in play.
Temporary. Range? BMW and Volvo are introducing 400+ mile cars this fall that aren’t the $100k+ models like an R1S or Gravity. And these are 800V cars that charge fast on existing 350kWh chargers. Price? They are coming down as well. Infrastructure continues to improve rapidly even as sales slow. I’m thankfully noticing this in rural Texas. Texas has a plan to have multiple fast chargers in every county seat, making even rural travel possible.
It’s all getting noticeably better, to the point the real problem left is misinformed public opinion from people who don’t yet own an EV and still think they need to wait until it “charges as fast as gas”. Where EV's Really Need to Go
Hey, I’m not the one who declared that Tesla is now an “AI robotics company.” That was Musk. You don’t have to believe him if you don’t want to, but that would be rather an odd position for a long investor in Tesla to take. And they’ve backed it up with actions. They’ve stopped developing new mass-market models, halted their previously planned expansion of auto manufacturing facilities, replaced existing auto production lines with robot production lines, and have had flat sales in EV’s over the last three years. If you want to continue to believe that Tesla’s going to pivot back to trying to drive growth with significantly expanding EV sales outside of their autonomy efforts, I’m not going to be able to dissuade you. But if flies in the face of everything the company is saying and doing.
That analogy might have worked back when the race was first starting, the head start was only 100 miles, and we didn’t know how fast my vehicle was. But that’s not where we are. We’re 1,000 miles into the race, my car has been shown to be at least as fast as you said your car was going to be, it’s increasingly clear that your car is going to be way slower than you expected it to be (due to road conditions and other factors unrelated to the car) - and you’re still not out of the driveway.
That’s the problem Tesla faces. Waymo is scaling quickly. The metros they’re already in include about 20% of the U.S. population. The total U.S. population within the 100 largest metros - the realistic outer bounds for a robotaxi network that requires support infrastructure - is “only” about 65% of the population. The scaling race is about 1/3 over already. Tesla’s problems expanding within and beyond Austin indicate that their approach to autonomy doesn’t solve the scaling problem - they still need to “tune” FSD to local conditions and trouble spots just as much as Waymo does, and they still need time to roll out the infrastructure to support the robotaxi operations.
Which is why Apple and Coke and Amazon and Procter & Gamble famously have stopped spending any money on advertising. And why quality movies and television shows always find their audience, rather than getting drowned out by other alternatives. Oh, wait…
In this day and age, there’s no guarantee that if you build it and deliver value, the customers will find you. That might work if you’re the first mover in a very new automotive segment, a durable good whose cost is so large that nearly customers will engage in research before making a purchase. It is highly unlikely to work if you’re the second- or third-mover in an app-based service offering that provides a relatively functional and fungible offering. Once people already have a robotaxi app on their phone, they’re pretty unlikely to try to research a second one.
I mean, they’re still making Cybertrucks. Losing money on every vehicle, losing money on the capital cost of the production lines, losing money on the operating costs of those heavily under-utilized facilities. Not only that, he has SpaceX buy them - where they sit largely unused in parking lots. We’re coming up on three years now, and the Cybertruck is a commercial failure with literally no hope of recovery. If Tesla was “not hesitant about changing direction when needed,” Cybertruck would cease production. But it will probably plod along for years, like the Solar Roof before it, for reasons completely unrelated to whether the product is useful or wasteful.
Musk has made a really big bet on autonomy working. He always says it’s right around the corner - he’s been saying that for almost a decade now. He built a production line with a volume capacity of more than a hundred thousand Cybercabs per year. They’ve already built several thousand of these things, more than they could ever hope to need over the next two or three years. It is very, very unlikely that they would shut down Cybercab production merely for the teeny tiny little reason that they can’t get the cars to work.
It’s far more likely that they’ll keep doing what they’re doing - rolling them off the line at a modest but still expensive clip, building them up in parking lots and ostensibly “adding” them to the fleet even though they don’t actually operate much.
As we’ve discussed before, this is wrong. A 10- or 20-minute charge isn’t good enough. EV’s need to get to the point where if someone looks down at their fuel tank and realizes they unintentionally let their fuel fall below what they need for the day, that they can fuel up without having it break their schedule. That means fast refueling and that charging infrastructure being ubiquitous enough that the fast charger is close to where you are and will nearly always have an open spot.
It’s not the road trip. It’s the every day, “crap I need to fill up now” scenario that is the basis for “range anxiety.”
Which is proving to be a non-issue. Long term battery life is proving to be a non-issue. Again, the number one issue with getting new EV buyers is not the current technology, but a public perception that has not caught up to today’s reality.
Within a week of that big Austin announcement CyberCab has dropped from 100 cars to… drumroll… only 8.
The average vehicle price paid in the US is around $35k. 75% of the car purchases are used vehicles. There is still a gap in what the consumer is willing to pay and then the functionality of the vehicles. US drivers have an expectation of use, even if 99% of the time the car is traveling less than a few miles and carrying only 1 or 2 passengers and well suited towards EV’s.
The latest offering from BMW is still in the $55k to $60k range and is what I would call smallish. But, I think the continued range breakthrough and as prices come down, we may see broader adoption. But, based on the consumer survey data, there is little in the way of interest and I doubt it has much to do with a lack of understanding of the capabilities.