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Tesla’s valuation has been spectacular lately, closing at an all-time record of $489.88 earlier this month and still hovering pretty close to that astronomical figure as of this writing. Tesla bulls, notably Dan Ives of Wedbush capital, say this is because Tesla is on the verge of successfully deploying robotaxis, and that Tesla’s stock price could spike to $800 next year.
A New York Times report from Thursday reads like a valiant attempt to talk sanity into anyone who believes the Wedbush Tesla narrative. It’s not going to work, because Tesla is selling a pretty wild fantasy that isn’t mentioned in the Times’ piece.
Central to the Times’ report is the observation that in Austin, Tesla’s proof-of-concept city as a Robocar manufactuer-operator, an estimated 30 self-driving taxis have supposedly rolled onto the roads since June, an absolutely dismal number compared to Waymo’s 200 in the same city since March. The source the Times links to for the Tesla stat is a site called teslarobotaxitracker.com, which is run by an Austin-based robotaxi enthusiast named Ethan McKanna.
And the Times points out that each and every Tesla self-driving taxi with passengers in it still has a human safety monitor—while Waymo’s fleet is unsupervised—at least inside the car.
The Times is far from the first to claim that Waymo is way ahead of Tesla. Jeff Dean, the chief scientist at Google DeepMind—who shares a parent company, Alphabet, with Waymo, wrote on Twitter earlier this month, “I don’t think Tesla has anywhere near the volume of rider-only autonomous miles that Waymo has (96M for Waymo, as of today). The safety data is quite compelling for Waymo, as well.”
Elon Musk, the CEO of Tesla, replied to Dean by making one of his famous outlandish predictions: “Waymo never really had a chance against Tesla. This will be obvious in hindsight.”
One issue with any Waymo-Tesla comparison right now, however, is that Waymo’s business is running into some major potholes, and they might be relevant. This past weekend, Waymo had to shut down its service in San Francisco when its vehicles faltered at dark stoplights. It turned out that Waymo’s lack of safety drivers might have contributed to the problem, since the motivation for the shutdown was a logjam caused by the Waymo software’s high volume of requests for human feedback.
But importantly, the bullish case for Tesla’s Robotaxi service doesn’t seem to be based on the existing ride-hailing service that relies on Model Y cars as autonomous taxis. It’s most likely based on the large scale rollout of a two-seater car without a steering wheel or pedals called the Cybercab that Elon Musk unveiled in 2024, and claimed will be available for purchase by the end of 2026.
The supposed silver bullet for Cybercabs is that people will ostensibly buy them, and use them for their own transportation needs, but at other times release them into the wild as robotic servants that make them passive, or passive-ish, income. This would benefit Tesla in theory because it would rely on the Tesla app ecosystem, and Tesla would get a cut, while the car owners have to deal with charging, maintenance, insurance, cleaning, and everything else that’s annoying about owning a car.
And we know Elon Musk has it in his head that he’s going to get something like a million Cybercabs onto the road—or at least some mix of hundreds of thousands of Model Y taxis alongside Cybercabs. We know this because if Tesla doesn’t deploy at least one million self-driving taxis, Elon Musk doesn’t get all of his notorious $1 trillion pay package.
The Times’s piece isn’t wrong to quote experts saying Tesla is “way behind Waymo.” But it includes passages like this that make near-religious faith in Tesla’s future revenue sound more mysterious than it is:
Some analysts also doubt whether driverless taxis will generate trillions of dollars of revenue, as Mr. Musk has predicted, or be very profitable. For revenue to even reach hundreds of billions of dollars, many people would have to give up their personal vehicles in favor of riding in taxis, which is unlikely anytime soon, said Michael Tyndall, an analyst at HSBC.
It’s not that the Times is comparing apples and oranges. It’s more like they’re comparing otherwise decent apples with worms in them to magical apples from a wizard who claims his apples can grant wishes, but no one can have one yet. It’s more dubious and fantastical than the extremely sane adults in the room are even letting on with their pleas for sanity. But hey, let’s all just wait and see what the wizard has in store for us.
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Mike Pearl
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