Normally, late Friday news dumps are designed to get things out there that you really don’t want the public to focus on. They usually involve information you know you must make public, although you would hide it if you could. Politicians know this process all too well. But as he always does, Elon Musk broke the mold of this conventional wisdom when he dropped a news bomb on the world late Friday.
“Elon Musk sharing himself on X that Tesla will unveil its long-awaited Robotaxi on August 8th,” CNBC host Brian Sullivan began on Last Call Friday evening. “The news sending shares of Tesla up after hours.”
Robotaxi is Tesla’s long-awaited technological marvel where fleets of A.I.-powered Tesla vehicles might transport passengers around all day without a human driver. Some have the vision that you’ll be able to eat, sleep, work, read, or do whatever else you’d like in the vehicle, as it drives you to your destination. These future thinkers believe Tesla’s Robotaxis won’t even have steering wheels or pedals.
And on Friday, Elon Musk said Tesla will unveil this technology in a mere four months.
“This is one of those that’s going to have more speculation than anything because we didn’t get much from Elon Musk today except for one post on X late this afternoon. It said Robotaxi unveiled on 8/8. August 8th. Alright, so what does that mean?” Phil LeBeau, CNBC Auto and Airline Industry Reporter, said. “Well, a lot of questions here. First of all, what are we talking about in terms of entry into service? Where will the location of Robotaxi be? Certainly not going to be widespread. It’ll probably be in one specific area, maybe geo-fenced area. What’s the level of autonomy? Remember, full self-driving is not full self-driving. It’s nowhere close to it.”
This part of the report goes against some online videos and first-hand accounts that show drivers traveling long distances with very little, if any, human intervention. While noting the technological development, the analyst seemed to indicate that Musk’s announcement creates more questions than answers in his mind.
“And has the technology evolved to where it could be? And where is the vehicle going to be manufactured?” LeBeau asked, rhetorically. “As you look at this, this all sets up the question that will come when Tesla reports its Q1 results on April 23rd. A lot of questions will be about the Robotaxi, because Brian, at the end of the day, on paper the Robotaxi – or any autonomous taxi service – makes complete sense. You strip out the driver, you lower the cost. Fantastic. Here’s the problem. We are nowhere close to having the level of autonomy widespread, where this can take off. Now, has he cracked the code? We’ll find out in the months to come.”
LeBeau brought up the point about Tesla’s upcoming earnings report, which many feel will be underwhelming especially after what some see as a dismal deliveries report last week. Sullivan continued, adding that Tesla this month has offered free self-driving upgrades to vehicle owners, which has led to an explosion in full self-driving miles logged by Tesla drivers. And the more miles driven, the exponentially faster the A.I. technology can improve.
Sullivan welcomed his next guest to discuss the topic.
“Robotaxis. Everyone’s been waiting. Is this a big deal?” he asked Gene Munster, Deepwater Asset Management Managing Partner.
“Brian, it is a big deal. And I think it’s important context to the investment. Phil framed it in well in terms of what the potential impact is, just higher margin. Before I do that, I just want to mention, this is probably coming at the cost of not pursuing the cheaper Model 2 $25,000 vehicle that was on the table. They’ve talked about that. That probably is now on pause and all the focus is on Robotaxi,” Munster said.
Some analysts opined over the weekend that Musk may have been forced to make the announcement after a Reuters report that said Tesla was putting their $25k vehicle project on pause. Others in the know, such as Sawyer Merritt, Farzad Mesbahi, Herbert Ong, Alexandra Merz and many other Tesla experts, have noted that it is believed both the Model 2 and Robotaxis may be designed on the same general platform. It is their belief that shifting focus to Robotaxi may work in tandem with the development of Model 2, rather than against it. Time will tell if this thesis, popularized through information from Walter Isaacson’s 2023 Elon Musk biography and elsewhere, proves true.
For his part, Merritt posted Friday that while it took Tesla 3.5 years to hit one billion miles driven on FSD, he thinks it will take less than sixty days to hit the second billion.
As a whole, the mainstream media has been in full “Elon bad” mode for more than a year, as he has disrupted their framework of control by opening up his platform X to free speech and information sharing. It has been extensively detailed how the media and liberal cultural elites have recoiled because X has been opened up from its days of being the liberal echo chamber, Twitter.
Some also think the media has been anti-Musk because he poses a business threat to their major advertising partners from the auto, banking, and artificial intelligence industries. As the popular Invest Answers program has chronicled, Musk is a major disruptor and the old guard is fighting back. So in recent years, the elite corporate media’s knee-jerk reaction is to take a negative view toward whatever Elon Musk says or does. This CNBC conversation, however, included both the unknowns and the potential of the hard-to-fathom, futuristic advancement.
“I suspect the reason why they’ve made that change here recently is they have more confidence in some of that beta that you were just talking about. The response so far including our own Andrew Murphy from Deepwater who’s been following this uses this technology, has been that this is a step function improvement,” Munster added. “So we’re getting much closer.”
Munster offered more context to his thoughts and how these developments may provide a benefit to Tesla investors.
“It will take a long time to get there. Three, four, five years. But to put it in perspective, if they do a million Robotaxis. That’s a number that Elon talked about in 2019. A million Robotaxis. And those Robotaxis earn $250 a day each. And they take a 15% take rate on that. That adds ten billion to the operating line, the net income line,” Munster said. “That is basically double what their current net income is. Again, it’ll take a long time to get there. But if you just think about the levers and about shifting this company in a whole different direction, back to the growth topic. This has the potential to do that.”
Elon Musk is nothing if not unconventional. And against the grain, he made a late-Friday announcement – a mere sentence – that might just change our lives in ways we cannot yet comprehend.
Rick Schultz is a former Sports Director for WFUV Radio at Fordham University. He has coached and mentored hundreds of Sports Broadcasting students at the Connecticut School of Broadcasting, Marist College and privately. His media career experiences include working for the Hudson Valley Renegades, Army Sports at West Point, The Norwich Navigators, 1340/1390 ESPN Radio in Poughkeepsie, NY, Time Warner Cable TV, Scorephone NY, Metro Networks, NBC Sports, ABC Sports, Cumulus Media, Pamal Broadcasting and WATR. He has also authored a number of books including “A Renegade Championship Summer” and “Untold Tales From The Bush Leagues”. To get in touch, find him on Twitter @RickSchultzNY.
