Elon Musk is ready to introduce Tesla as a robotaxi company

• Elon Musk has a big task this week: convincing investors that Tesla is more than just a car company.
• The Tesla boss is expected to lead Tesla’s Robotaxi Day on Thursday and share updates on driverless cars.
• This comes at a time when Tesla’s revenues have fallen.

Over its nearly 100-year history, Warner Bros. from Burbank, California, set the stage for some of America’s most iconic stories. It could happen again as Elon Musk prepares to use the studio to tell a different story: Tesla is more than just a car company.

On Thursday, Tesla’s billionaire boss is expected to take center stage at the historic California site to host Robotaxi Day. The long-awaited event – ​​originally planned for August – aims to lend weight to the electric vehicle maker’s narrative that it is a technology company first and an automaker second.

Increasingly, Musk is positioning Tesla not only as a company focused on accelerating the transition to clean energy, much like traditional automakers, but also as a company that plans to become a leader in the areas of intelligence artificial intelligence, robotics and autonomous vehicles.

Musk played his part in creating this hype, sharing a poster about the event on social media titled “We, Robot,” while claiming that the day would be “a day for the history books.” But as Elon Musk prepares to reveal much of his vision for Tesla’s future, he finds himself facing a high-stakes situation.

Tesla’s high-risk pivot

Musk has given investors strong signals over the years that he intends to make Tesla something more than just an electric vehicle maker.

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In 2019, at Tesla headquarters in Palo Alto, the electric vehicle chief told shareholders that by 2020, he was confident a fleet of a million driverless robo-taxis would take over the streets and ferry passengers . Although he missed this deadline, he pushed Tesla into other areas.

In July, Musk wrote on first time in 2022 was named “Optimus.”

More broadly, Musk could look to humanoid robots and driverless cars as a way for Tesla to generate value from AI, the hot technology that has been firmly on the global agenda. Silicon Valley after Sam Altman, co-founder of OpenAI and Musk’s nemesis, releases ChatGPT in late 2022.

That Tesla can seize a broader opportunity through robots and AI is not just Musk’s belief. Andrej Karpathy, Tesla’s former head of AI, said in a recent episode of the “No Priors” podcast that he didn’t think Tesla was a car company; In his view, “cars are essentially robots,” he said. Meanwhile, in July, Wedbush analyst Dan Ives said the “Tesla AI story could be worth over $1 trillion and is the most undervalued AI name.”

However, what is key to note is the timing of Tesla’s robotaxi push. This comes at a difficult time for Elon Inc. On the one hand, Tesla has not been able to escape the sales pressure that has hit the broader electric vehicle market.

In the first half, Tesla generated revenue of $46.8 billion, compared to $48.3 billion in the same period last year. While Tesla reported a 6.4% year-over-year increase in deliveries for its third quarter, its value remains more than $600 billion below the peak of $1.2 trillion it reached in November 2021.

Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, an industry firm focused on market pricing and electric vehicle supply chain data, said he expects electric vehicle growth to continue. continue in the long term, but acknowledged that recent macroeconomic headwinds had led to a slowdown.

“You saw higher interest rates, inflation, all kinds of hangovers from the pandemic,” Rawles told Business Insider. “Sales of electric vehicles have been growing much faster than those of traditional internal combustion engine vehicles; they’re just not growing as fast as people thought.”

Reactions to Musk’s overall brand have become more visceral as Tesla’s shareholder base has divided over his leadership following his controversial transformation of Twitter into X and support for the former President Donald Trump.

“Elon bought Twitter and decided he was going to become a global leader for Elonville’s right-wing country,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a Tesla shareholder.

Gerber told BI that while he thought electric vehicles were a business that could be “wonderfully profitable” – providing strong justification for investing in Tesla in previous years – he felt much less confident about the pivot of the robotaxi.

This is largely because Musk will be entering a market where competitors have a head start. Waymo, owned by Google parent company Alphabet, entered into a partnership with Uber last year. BYD, a Chinese electric vehicle maker, has also partnered with Uber to offer “autonomous vehicles” to its customers around the world, a press release said in July.

In China, Tesla’s largest market outside the United States, local internet giant Baidu has already deployed a fleet of robo-taxi called Apollo Go, launching in Wuhan in 2022. It is aggressively attracting consumers with heavy subsidies which result in very low prices.

“Robotaxis, in theory, could be profitable as long as there isn’t a lot of competition,” Gerber told BI. “The problem is that it exists and it’s already on its way.”

Questions also remain about regulators’ confidence in the safety of robo-taxis. Last year, GM-owned self-driving company Cruise saw its reputation tarnished following accidents involving its vehicles. Incidents like this have a ripple effect on how the broader autonomous vehicle space is viewed, including Tesla’s robotaxis.

This is especially true because experts believe the fully realized version of Musk’s robotaxi ambitions presents technical challenges. Paul Miller, principal analyst at Forrester, said fully autonomous driving meant “a vehicle should be able to drive itself just about anywhere a human driver can, on any type of road, in any type of road.” weather conditions”.

“It’s more feasible to allow cars to drive alone on particular types of roads, in known locations and under specific conditions,” he said ahead of Tesla’s Robotaxi Day.

So it’s clear that Musk has a big story to tell on Thursday. Under the lights of Hollywood, he hopes that investors will be ready to believe in it as much as he does.