Tesla has had a bad year selling electric vehicles, and its sci-fi future isn’t exactly panning out.
Elon Musk doesn’t seem to know what he wants Tesla to be. At its core, the company makes electric vehicles, and it has done exceptionally well at that. But the Tesla of 2024 is in a kind of corporate limbo. Instead of discussing its flagship EVs, Musk likes to talk about Tesla’s newer, flashier products, like its nascent artificial-intelligence system and its humanoid robot. But the biggest new business, the one that Musk says will fundamentally change what Tesla does, is the Robotaxi. Musk has all but pinned Tesla’s future to a vision of his cars becoming Ubers, propelled by his AI network acting as the brain behind the wheel, bringing riders wherever they need to go on demand. Wall Street loves the idea so much that Musk has once again become the world’s richest man, and by a pretty wide margin, as the stock has surged higher on the plan. “By far, the biggest differentiator for Tesla is autonomy,” Musk said on an investor call Tuesday.
That future, though, appears to be on hold. In Tesla’s newest quarterly earnings, released on July 23, there were a few bad pieces of news for the autonomous future. The first was that the “timing of Robotaxi deployment depends on technological advancement and regulatory approval.” Translation: Reliable Robotaxi technology doesn’t exist, and we don’t have government approval for it, either. (Unspoken is that Tesla is reportedly under a federal criminal investigation for its “Full Self Driving” technology being faulty). This was previewed a few weeks ago, when Tesla moved back the unveiling of the Robotaxi from August to October, a delay that Musk attributed to wanting to “improve the Robotaxi as well as add a couple of other things.” There also appears to be a manufacturing snag that investors think can set back the Robotaxi back to 2027, investors told Bloomberg. Overall, the company spent $600 million — which would be a rate of $2.4 billion a year — on the AI technology it would use to power these self-driving cars, an absolutely bonkers amount of money even for Musk.
Usually, Musk does pretty well during investor calls. This is the venue, after all, where he’s on the phone with people who tend to be his biggest supporters, those who want to link their fortunes to his. But this one did not go so well. About 15 minutes in, Musk was asked when the first Robotaxi ride would come. His answer was rambling and disjointed, and hinged on Tesla’s FSD technology improving, but he said it could be as early as the end of this year. But, he hedged, “my predictions on this have been overly optimistic in the past.” While he was talking, the company’s shares fell about 4 percent in after-hours trading — a clear sign that Wall Street did not like what it was hearing.
Look — Tesla is not failing. It is a $770 billion company, by far the biggest EV seller in the U.S. It made $25 billion in revenue during the past three months. And it has rebounded somewhat from its abysmal first quarter. But the company’s profits are down 45 percent from last year, competitors are eating into its market share, and there just seems to be no direction. Musk first started promising a Robotaxi in 2016. He said there would be 1 million of them on the road by 2020. It’s possible, of course, that he could oversee some other technological breakthrough that the likes of Apple weren’t able to pull off with their own self-driving cars. But at some point, it seems more likely that he’s going to lose the patience of his biggest fans who just want him to make cars again.
