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The Tesla brand is on full display as CEO Elon Musk tries to convince Chinese and US regulators as well as Tesla investors that the company’s Full Self Driving (FSD) technology is nearly ready to emulate every driving task that a human currently undertakes. That goal of autonomy is essential to continued Tesla share value and confidence.
Tesla’s EVs are minimalist. With oversized touchscreens, a vast proprietary fast charging network, and industry-leading performance, Tesla has made the dream of transportation electrification a reality. Tesla’s allure as a software company whose software happened to be embedded in EVs was intriguing for an early adopter audience. They believed Musk held only positive intentions toward others and worked for the good of the mission and the enterprise he served.
Yet the other side of the proverbial coin attests to Tesla’s periodic struggles. There have been all those late new model delivery dates. There have been missed battery targets. The Semi is still almost nonexistent. Grand delivery numbers have been unrealized.
Competition has arrived and come alive. Because consumers have other EVs now from which to choose, the doomsday argument goes that Tesla’s fall from dominance was bound to happen. How much more demand can Tesla really expect without price parity with budget ICE cars? It’s true that the auto industry is in flux. Legacy automakers need to keep current shareholders mollified while they develop new EV models and shore up supply chains. Meanwhile, it has been hard for many to see how Tesla could continue to justify its market cap without a new and affordable model or a robotaxi technology breakthrough.
Challenges Pursuing True Full Self Driving
Musk, who once crowned himself “Technoking” of Tesla in an SEC filing, is adamant that the company’s most valuable asset is its data — Tesla’s advanced sensor suite is installed across millions of vehicles and gathers billions of miles of data per year. The thinking is that the scale of its fleet and data gathering may give Tesla the necessary foundation to become the first company to deploy full autonomy at scale.
Indeed, during last week’s quarterly earnings call, Musk announced that autonomous vehicles and AI were the primary areas of interest moving forward at Tesla. Company stock, which was then on a downward decline, reversed its trend, but has also fluctuated — at this writing, the value has lost $6 a share today and is at $178.85.
Our CleanTechnica editor-in-chief, Zachary Shahan, asked: Why doesn’t Tesla start with a Tesla ride-hailing service that uses human drivers? As an entree into the later robotaxi/autonomous service, it would immediately be a new and likely profitable business venture that would excite shareholders while they await further autonomy research and development.
And wait shareholders must. A letter posted on the National Highway Traffic Safety Administration (NHTSA) website this week asks Tesla to respond to a variety of factors related to its Full Self Driving (FSD) capability. Among the information sought is:
the total mileage covered by consumers as they use the system;
a count of Hands-on-Wheel warnings;
the design decisions behind the increased strictness monitoring of driver attentiveness; and,
other general decisions regarding the methods the company uses to formulate its FSD data.
NHTSA’s examination of Tesla autonomy dates back to August 2021. At that time, Tesla’s Autopilot methods for keeping drivers engaged were critiqued, with the caveat that its system was too permissive, resulting in a “critical safety gap” between drivers’ expectations and Autopilot’s actual capabilities. In January 2023, Tesla acknowledged that it was investigating CEO Elon Musk’s role in shaping Tesla’s self-driving claims. Now, in 2024, we have Musk’s vision and a bunch of Tesla drivers newly invited to test out FSD. But where, actually, is the company in fulfilling the promise of true full self driving?
Those in the “Go, Elon!” camp seem to be genuinely expecting strong Tesla growth from dramatic FSD improvements coming and stimulating that growth. Then again, as Bloomberg discussed this week, self-driving vehicle development has seen many setbacks in recent years.
Uber sold off its driverless car division after a fatal crash it never recovered from.
Argo AI, the startup Ford and Volkswagen had each seeded with billions of dollars, folded after its backers lost patience with how long it was going to take to commercialize the technology.
General Motors’ Cruise is crawling back from a crisis precipitated by one of its cars running over and dragging a pedestrian.
Waymo continues to trudge along, but there are no signs of massive expansion. More under the radar, Wayve, a UK self-driving startup founded in 2017, has raised $1.05 billion from high-profile investors including SoftBank, Microsoft, and Nvidia. So, money continues to pour in for a variety of approaches and startups. But are any of these companies actually close to mass-market robotaxis?
Questions about Tesla’s Future & Sharp Transition
Getting back to Tesla, as if to prove it wasn’t kidding about a major transition to robotaxis, last week Tesla laid off most of its Supercharger team. Some analysts have suggested that the decision was borne from the realization that it will become harder and harder to make money from charging as more companies enter the market. Yet the decision to reduce what the company does so well calls into question the pace of EV adoption rates in the US without ubiquitous and reliable charging stations. Will other auto manufacturers and companies really pick up the EV charging slack? If so, where does that leave Tesla? Then again, stock markets usually like it when companies lay people off. Will Tesla announce a stock buyback to please investors?
Why can’t investors — and innovators like Elon Musk — get enough of all things artificial intelligence? What if FSD is a technology that is years, if not decades, away from full-scale commercial adoption, as Bloomberg recently asked?
How will shareholders respond to Musk’s vision of FSD? As a reminder, the annual shareholder’s meeting will take place in a month, and already votes are being cast as to whether to continue to endorse the current Tesla board and to compensate Musk as recommended. It’s easy to forget that Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery said Musk had, in essence, overseen his own compensation plan — currently worth about $50 billion — with the help of compliant board members. The proclamation reinforced criticism about the ineffective nature of Tesla’s board of directors and their disinterest or inability in reining in their mercurial leader. Is the announced redirection of the company to robotaxis another example of Musk’s attentional issues and the board’s inability to manage its CEO?
Final Thoughts: What would Life with Autonomy Everywhere Look Like?
In the Amazon Prime dramedy The Upload, Nathan frequently contemplates his life trajectory while riding in an autonomous vehicle. As you’ll see in this clip below, the traffic around him is flowing in one direction at similar speeds, indicative of the way autonomy may move vehicles in the future. Nathan, who here is in his actual life (you’ll have to watch the show to see what I mean), is a bit of a rascal. He overrides the computer navigation and zips around traffic by steering with a handheld controller. A traffic control officer, who is viewing the scene remotely, stops him and gives him a warning. Nathan blames the vehicle’s autonomy and adds in a bit of disingenuous flirtation.
What do you think of this vision of future autonomous driving? Would Tesla’s Robotaxi be comparable? If your vision is a bit different, what do you see instead?
We’ll look for some clever and creative responses in the chat below.
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