Tesla’s Elon Musk unveils ‘Cybercab’ robotaxi as focus shifts to automation

Tesla CEO Elon Musk showcased on Thursday a long-awaited robotaxi with two gull-wing doors and no steering wheel or pedals and surprised with robovan, betting on a shift in focus from low-priced mass-market cars to robotic vehicles.

At a glitzy unveiling, Musk reached the stage in a “Cybercab” to be produced from 2026 —eventually in high volume — and priced under $30,000 US. He then introduced a robovan, which can carry up to 20 people though offered few further details.

But Musk, who has a record of missing projections — and himself said he tended to be optimistic with time frames — did not say how quickly Tesla could ramp up robotaxi production, clear inevitable regulatory hurdles or implement a business plan to leapfrog robotaxi rivals such as Alphabet’s Waymo.

Analysts and industry experts said establishing robotaxis could take years, particularly given the need to ensure safety and reliability. They pointed to accidents as well as the difficulty the technology has responding to scenarios such as inclement weather, complex intersections and pedestrian behaviour.

But Musk, wearing a leather-jacket and addressing crowds at the Warner Bros studio near Los Angeles, said autonomous cars could be 10 times safer than those driven by humans and drive five to 10 times longer.

“The autonomous future is here,” Musk said. “With autonomy, you get your time back.”

Musk had previously said he planned to operate a fleet of self-driving Tesla taxis that passengers can hail through an app. Individual Tesla owners would also be able to make money on the app by listing their vehicles as robotaxis, he had said. He made no mention of the app at Thursday’s event.

From automaker to AI robotics company

The event, titled “We, Robot” in an apparent nod to the I, Robot science-fiction short stories by American writer Isaac Asimov — echoed Musk’s comment that Tesla “should be thought of as an AI robotics company” rather than an automaker.

It started after a delay of nearly an hour, which Musk attributed to a medical emergency involving an attendee. The presentation, months in the making, lasted for less than half an hour and was watched by about four million people on Musk’s X social media platform alone.

“I’m a shareholder and pretty disappointed. I think the market wanted more definitive time lines,” said equity trader Dennis Dick at Triple D Trading. “I don’t think he said much about anything.”

Running the Cybercab will cost 20 cents a mile over time, and charging will be inductive, requiring no plugs, Musk said. Operating the robovans will be even cheaper — at five cents a mile.

Experts skeptical

The vehicles will rely on artificial intelligence and cameras rather than hardware common among robotaxi rivals, he said, such as lidar — an approach experts have flagged as challenging both from a technical and regulatory stand point.

Beyond vehicles, Musk touted “a lot of progress” made with its humanoid robot Optimus that could eventually be priced at $20,000 to $30,000 and which can perform many daily tasks.

Musk said in 2019 he was “very confident” Tesla would have operational robotaxis by 2020. This year, he diverted focus to the Cybercab and scrapped plans to build a smaller, cheaper car widely seen as essential to countering slowing EV demand.

Tesla is at risk of posting its first-ever decline in deliveries this year as buying incentives have failed to attract enough customers to its aging EV lineup, according to Reuters calculations based on third-quarter earnings. Price cuts meant to offset high interest rates have also squeezed profit margins.

Several companies attempting to crack the robotaxi market have suffered billions of dollars in loss, forcing some to shut shop.

Alphabet’s Waymo, with about 700 Jaguar Land Rover cars in its fleet, is the only U.S. firm operating uncrewed robotaxis that collect fares.

Self-driving technology

Amazon’s Zoox is testing purpose-built vehicles that resemble toaster ovens on wheels and lack manual controls. Cruise from General Motors, which uses the Chevrolet Bolt EV, this year indefinitely suspended plans to develop its self-driving Origin without controls.

Tesla’s approach to full self-driving technology, in its current iteration, requires constant driver attention but keeps costs down. It has, however, faced legal scrutiny with at least two fatal accidents involving the technology.

“We do expect to start fully autonomous unsupervised FSD in Texas and California next year,” Musk said. “That’s with the Model 3 and Model Y.”

He did not say whether the Cybercab uses FSD or new technology.