According to news on October 8, Tesla will hold a "self-driving taxi conference" in Los Angeles on October 10, local time. CEO Elon Musk needs to dazzle his audience to hide the fact that self-driving technology has been slow to materialize.
As early as March 2019, Musk began to draw a blueprint for autonomous driving when he hosted the company's "Autonomous Driving Day" event. Now, at this Thursday's press conference, what he wants to do is to tell this story.
Five years ago, Musk unveiled his vision for self-driving taxis, miracles that could drive themselves, generate their own revenue, and make money for their owners. He claimed that such a vehicle would become a reality by the end of 2020. Even taking into account the impact of the epidemic, this goal has been severely delayed. During this stage, Tesla's electric vehicle sales, although they once increased fivefold, gradually leveled off. In terms of stock market capitalization, this has been reflected in the company's climb from less than $50 billion to a peak of $1.2 trillion, before falling back to about $400 billion.
As the popularity of the electric vehicle market gradually recedes, artificial intelligence gradually fills this gap. Bullish Tesla analysts, and Musk himself, often attribute a small portion of Tesla's value to electric car sales, while the bulk of the value is tied to visions of self-driving taxis and robots. Musk declared that October 10th will be "a day that will go down in history" and used the slogan "We, the robots" for this purpose.
It is worth noting that the origin of this conference was a debate on social media X. Tesla held an investor day event in March 2023 to showcase Musk's "Tesla Vision Chapter 3," which focuses on developing low-priced electric vehicles. But Reuters reported about a year later that the low-price electric vehicle project mentioned by Musk had been cancelled. At the time, Tesla's stock price was weakening after it abandoned its electric vehicle growth target, and the report further dampened market confidence. Musk accused Reuters of lying, but then suddenly announced that a "self-driving taxi" would be released on August 8, indirectly confirming the news, and then proposed a new ambitious plan.
Due to various reasons, the press conference was postponed for two months, which also raised questions about Tesla's execution ability. If Musk announces another new plan this week, the life cycle of his "big picture" plan will become extremely short.
Tesla’s humanoid robot Optimus is expected to take the stage as a future highlight. However, no one expects Tesla to announce that they have solved a problem posed five years ago: developing a self-driving taxi driven by general artificial intelligence, and that Tesla is willing to take responsibility for it. The car relies on cameras and conventional radar, rather than expensive LiDAR technology, and can perform over-the-air software updates to give the millions of Tesla vehicles across the U.S. the ability to drive autonomously.
Even Morgan Stanley analyst Adam Jonas, who is very bullish on Tesla, does not have such expectations. In his most recent report, he expected the launch event to potentially showcase a "connected taxi" capable of autonomous driving on closed routes set by Tesla. He also expected Tesla to launch a "supervised FSD ride-hailing service," an Uber-like service provided by Tesla owners with the Full Self-Driving (FSD) feature package, but with the owner letting the car drive itself in certain situations. Tesla can obtain more self-driving data this way, but unless the price is significantly reduced, it is difficult to imagine why passengers would choose this service.
All these signs point to Tesla giving in on self-driving as a means of repositioning itself in a rapidly changing market that will also impact current leader Waymo.
Waymo has been steadily growing its business for some time, and doing it in a very smart way. The company just announced the expansion of its self-driving taxi service to Austin and Atlanta, in partnership with Uber, in addition to Phoenix. In this way, Waymo has access to Uber's huge customer network and can adjust the size of its fleet according to actual demand to maximize utilization. At the same time, Uber's flexible driver team can cope with peak demand and reduce Waymo's unit costs. For Uber, this partnership provides a differentiated new vehicle and makes it a reliable partner in this field after its failure to develop self-driving cars.
In a sense, Waymo is more like the tortoise in this tortoise and the hare race, gradually deploying a small number of self-driving taxis in a limited area, supported by remote operators, and gradually building up self-driving capabilities. Although this approach is slower, it is safer.
Alex Roy, an autonomous driving expert and founder of the venture fund New Industry Management, favors Waymo, but he also pointed out that if Tesla finally achieves universal autonomous driving with lightweight hardware, "Waymo will face an existential crisis."
Achieving what Tesla calls universal self-driving remains an arduous task that will take time and money. Philip Koopman, an associate professor at Carnegie Mellon University and an expert on autonomous driving, believes that the auto industry underestimates the complexity of various potential unexpected situations on the road. In order to truly achieve security, many situations need to be dealt with that machines will rarely encounter. Koopman concluded, "The key is not how rare something is, but how likely it is to happen to you."
So Tesla clearly needs more time. Roy recently wrote an article about Tesla's "mastering the narrative," describing how Tesla is redefining society's understanding of electric vehicles and autonomous driving by making substantial advances in battery technology and vehicle design, while ingraining terms like "autonomous driving," "robotaxis" and "superchargers." The company has maintained this ability to distort reality despite missing many of its stated goals. Best of all, even as Tesla's core business has stagnated, the company's stock price has maintained impressive growth.
The upcoming celebrations in Los Angeles are designed to solidify that status in the face of undeniable improvement from their rivals. An effective way to continue to do this might be for Tesla to release relevant data proving that its driver assistance features are far safer than humans; or to announce how many Tesla buyers actually paid extra for FSD software.
It's strange that a company that cites safe autonomous driving as its main investment rationale is unwilling to confirm this with a few simple figures. Perhaps Musk will still pay more attention to performance rather than substance at Thursday’s press conference. The question, as always, is whether investors will be fooled by him again and forget about the unfulfilled promises.