Elon Musk is keeping investors’ dreams of a Tesla robotaxi alive

By
just
about
every
measure, Tesla’s

first-quarter
earnings
report
on
Tuesday
was
dreary.
The
company
missed
estimates
on
the
top
and
bottom
lines.
Revenue
fell
by
9%
year
over
year,
the
worst
decline
since
2012.
Auto
sales
dropped
13%
from
the
same
period
in
2023.
Free
cash
flow
turned
negative.

But
CEO Elon
Musk downplayed
most
of
that
and
suggested
investors
focus
their
attention
elsewhere.

Rather
than
dwell
on
quarterly
financials
or
the
massive

restructuring
announced
last
week,
Musk
reiterated
his
vision
of Tesla as
a
company
that’s
building
artificial
intelligence
software
to
turn
existing
cars
into
self-driving
vehicles,
dedicated
robotaxis
that
will
make
money
for
their
owners
and
a
driverless
transportation
network.

This
is
the Tesla
Musk
is
selling
to
Wall
Street,
and
he’s
telling
anyone
with
doubts
to
stay
away.

“If
somebody
doesn’t
believe Tesla’s
going
to
solve
autonomy,
I
think
they
should
not
be
an
investor
in
the
company,”
Musk
said
on
the
earnings
call.
He
added, “We
will,
and
we
are.”

Tesla
shares
soared
13%
in
extended
trading
Tuesday
after
the
earnings
report,
despite
the
disappointing
results.
Some
of
the
optimism
was
tied
to
Tesla’s
announced
plans
to
start
production
of
new
affordable
electric
vehicle
models
in “early
2025,
if
not
late
this
year.”

The
stock’s
rally
picked
up
steam
during
the
earnings
call
as
Musk
veered
to
the
future.
He
casually
mentioned
that
the
company’s
robotaxi,
which
he
has
long
said
is
coming,
will
be
called
the
CyberCab.
In
a
shareholder
deck
that
Tesla
published
before
the
call,
the
company
featured
a “preview
of
ride-hailing
in
the
Tesla
app.”

Musk
also
talked
up
a
driverless
network
that’s
like


Uber
with
Tesla
autonomous
vehicles.

“When
the
car
is
not
moving,”
Musk
said, “there’s
potential
to
actually
run
distributed
inference,”
through
the
hardware
that’s
in
the
cars.

Musk
has
been
making
these
kinds
of
pronouncements
for
years.

In
2015,
Musk
told
shareholders
that
Tesla
cars
would
achieve “full
autonomy”
within
three
years.
They
didn’t.
In
2016,
Musk
said
a
Tesla
car
would
be
able
to
make
a
cross-country
drive
without
requiring
any
human
intervention
before
the
end
of
2017.
That
hasn’t
happened
either.

And
in
2019, on
a
call
with
institutional
investors
that
would
help
him
raise
more
than
$2
billion,
Musk
said
Tesla
would
have
1
million
robotaxi-ready
vehicles
on
the
road
in
2020,
able
to
complete
100
hours
of
driving
work
per
week
each,
making
money
for
their
owners.

The
robotaxis
would
make
Tesla
a
company
worth
$500
billion,
he
said
at
that
time.
Tesla’s
market
cap
is
around
that
mark
now
and
even
topped
$1
trillion
in
2021,
but
the
company
has
never
managed
to
deliver
on
its
driverless
promises.

NBC
News

reported
recently
that
the
company
hasn’t
even
sought
permits
that
would
allow
it
to
test
and
operate
robotaxis
in
three
states,
including
California
and
Nevada,
where
it
employs
thousands
of
people.

Separately,
the
California
Department
of
Motor
Vehicles
has
filed
a

legal
complaint
against
Tesla,
saying
it
engaged
in
false
advertising
and
marketing
concerning
its
driver
assistance
systems
—
Autopilot
and
Full
Self-Driving
(FSD)
systems.
Autopilot
is
the
standard,
and
FSD
costs
$99
per
month
or
$8,000
upfront.
Both
require
human
drivers
at
the
wheel,
ready
to
steer
or
brake
at
any
time.
Tesla
is
defending
itself
in
court
against
the
accusations.

On
the
earnings
call,
Musk
said
he
believes
FSD
will
soon
be
ready
to
expand
geographically
to
China
pending
regulatory
approval.
He
didn’t
mention
the
California
regulator’s
lawsuit.

Musk
said
people
who
haven’t
tried
Tesla’s
latest
FSD
updates “really
don’t
understand
what’s
going
on.”

His
bluster
isn’t
limited
to
cars.

At
an
AI
Day
in
August
2021,
Musk
said
Tesla
would
build
a
humanoid
robot,
now
known
as
Optimus.
The
company
didn’t
have
a
hardware
prototype
to
show
at
the
time,
so
an
actor
dressed
in
a
spandex
bodysuit
danced
onstage
in
its
place.
In
2022,
Tesla
unveiled
its
hardware
prototype
of
Optimus.

On
Tuesday,
Musk
said
Optimus
is
already
capable
of
doing
some
unspecified
factory
tasks.

“We
may
be
able
to
sell
it
externally
by
the
end
of
next
year,”
he
said. “Optimus
will
be
more
valuable
than
everything
else
combined
because
if
you’ve
got
a
sentient
humanoid
robot
that
is
able
to
navigate
reality
and
do
tasks
at
request,
there
is
no
meaningful
limit
to
the
size
of
the
economy.”

Whether
all
of
these
capital-intensive
and
far-out
projects
belong
at
Tesla
is
a
question
that
many
investors
and
analysts
are
asking.

Musk
owns
a
20.5%
stake
in
Tesla,
​​more
than
715
million
shares,
as
of
March
31,
according
to
the
company’s

recent
proxy
filing.
He’s
used
around
238.4
million
of
those
shares
as
collateral
to
secure
personal
debt.
In
January,
he
began
angling
for
even
more
control
of
Tesla.

“I
am
uncomfortable
growing
Tesla
to
be
a
leader
in
AI
&
robotics
without
having
~25%
voting
control,”
he

wrote
in
a
post
on
X. “Enough
to
be
influential,
but
not
so
much
that
I
can’t
be
overturned.”

Musk
created
a
new
startup,
xAI,
to
develop
AI
products
to
rival
those
from


Microsoft-backed
OpenAI.
Before
starting
xAI,
he
was
already
serving
as
CEO
of
Tesla
and
SpaceX,
and
was
technology
chief
at
X,
which
he
owns.
He’s
also
the
founder
of
brain
computer
interface
company
Neuralink
and
tunneling
venture
The
Boring
Co.

Alex
Potter,
an
analyst
at
Piper
Sandler,
asked
Musk
on
the
earnings
call
if
he’d “come
up
with
any
mechanism”
to
ensure
he
would
have
the
requisite
level
of
voting
control
at
Tesla
because,
if
not, “the
core
part
of
the
thesis
could
be
at
risk.”

“No
matter
what,
even
if
I
got
kidnapped
by
aliens
tomorrow,
Tesla
will
solve
autonomy,
maybe
a
little
slower
but
it
would
solve
autonomy
for
vehicles
at
least,”
Musk
said. “I
don’t
know
if
it
would
win
with
respect
to
Optimus,
or
with
respect
to
future
products,
but
there’s
enough
momentum
for
Tesla
to
solve
autonomy,
even
if
I
disappeared,
for
vehicles.”

But
he
was
quick
to
tell
investors
that
the
company
needs
him
to
achieve
his
loftiest
goals.

“If
we
have
a
super
sentient
humanoid
robot
that
can
follow
you
indoors,
and
that
you
can’t
escape,
we’re
talking
Terminator-level
risk
yeah
I’d
be
uncomfortable
if
there’s
not
some
meaningful
level
of
influence
over
how
that
is
deployed,”
he
said.