These reasons prompted Elon Musk to bet on robotaxis.

This morning, European time, in front of a group of guests, behind closed doors and with Elon Musk as the presenter, Tesla presented the new Tesla Cybercab. The company’s promised but sometimes delayed robotaxi was unveiled to the public for the first time.

During the presentation, Musk wanted to make it clear that prioritizing the use of fully autonomous vehicles is, in his opinion, the best future that exists for cities. The goal is to eliminate or reduce the number of private cars that sit stationary most of the time, in favor of cabs with wheels that allow for safer and less expensive transportation.

This idea will be presented in Tesla Cybertaxia two-seater, fully autonomous car without pedals or steering wheel that will move using cameras and artificial intelligence. All this for a price of $30,000, which is close to the price of the rumored Tesla Model 2, the electric vehicle company’s affordable car project.

Apparently, the project changes the company’s road map. For years, it was assumed that Tesla’s compact car could lead the industry by offering a car with a better range-to-price ratio than its competitors. However, the project appears to have been cancelled, or at least stopped.

Which path does Tesla want to take?

Is the bet on autonomous driving the right one?

A context that has become complex

“Your vision is great, but someone needs to update it. At this point, within the next 24 months, Tesla should be selling electric vehicles. Why aren’t we focusing on this?” – criticized Ross Gerber, Tesla shareholder and CEO of Gerber. Wealth and investment management, words collected Reuters.

Gerber’s feelings coincide with those of investors and shareholders who have been waiting for the arrival of The most affordable Tesla like May water. As well as potential customers who believed that they would have a car with the best range and price ratio on the market. However, already in April Reutersstated that this project was cancelled.

While Tesla leads electric vehicle sales, BYD has been surpassing them in recent months. The Chinese company’s sales reflect the huge potential of these companies in the local market and how they have absorbed Western manufacturers. Low selling prices have called into question whether European and American companies will be able to compete with these companies in the low-end electric vehicle segment.

Although it was expected that the Tesla Model 2 (the most repeated model name) would be a decisive driver for the sale of an unimaginable number of cars (20 million per year in 2030), the truth is that the expected numbers seem impossible, considering It would mean doubling the number cars that Toyota, the world’s largest manufacturer, puts on the market every year.

But also, what’s really difficult for any company is getting real profitability out of low to mid-low mileage vehicles. The increasing technological weight of current cars has led to an increase in the cost of cheaper cars. Volkswagen has long announced that it will not compete on volume as it has traditionally done, and Chinese brands have a gateway to Europe in this area.

For get performance Regarding this product, Tesla said it is developing a new production system that can save 50% of costs compared to current vehicle production costs. He also sought to have new batteries that would reduce their price and therefore the final price of the vehicles. However, neither the car manufacturing process nor the battery manufacturing process seems to produce the expected results.

In this context, the question was whether Tesla could create a differentiated product in terms of autonomy/price compared to its competitors. Until now, this has been the company’s real weapon. The latest example is the European launch of the single-engine Tesla Model 3 with a large battery. Priced in Spain at €44,900 (before MOVES III), this car gets the most kilometers at this price.

However, Tesla appears to have been unable to find a way to replicate this strategy in smaller vehicles. Gradually the market receives models settled at 30,000 euros or less. The main disadvantage of cars costing 25,000 euros and less is achieving sufficient autonomy for driving them. The eventual Tesla Model 2 promised this, but at the moment it doesn’t look like we’ll see it in the short term.

Bet on AI

Given this situation, Elon Musk decided to lead a company developing software focused on autonomous driving through the use of artificial intelligence.

Tesla Cybercab or Tesla robotaxi are the best examples of this. The company’s big project in the coming years will focus on developing cabs on wheels that act as self-driving taxis. Moreover, it will have neither a steering wheel nor pedals if the company’s plans are fulfilled.

This approach is the result of a decision the brand has made in recent years. Much of the company’s efforts are focused on improving autonomous driving systems and, in particular, Full self driving (FSD). This system is the most advanced currently available and should reach Europe in 2025.

The system, which aims to be a fully autonomous driving package, has repeatedly clashed with regulators. The company was proven to be selling supposed capabilities through editing, it was described as “misleading advertising” and above all, it is not autonomous because it requires human attention, as Tesla itself reminds on its website.

However, Tesla’s hopes for developing autonomous driving systems remain strong. Their main goal is to be able to develop software to sell to third parties and generate a much greater economic return than what they get from selling cars.

If the robotaxi project is successful, the company hopes to make a giant economic leap. Over time, the company has eliminated all types of sensors and radars from its cars because it believes that by using a camera and training an artificial intelligence model, it can achieve better (and above all, cheaper) results.

Autonomous driving has become one of the greatest Meccas sector in recent years, but the passage of time seems to show that the volume of economic and technical resources required is enormous. Waymo and Cruise, the most famous companies in the market, have allocated billions of euros to offer a very limited range of services for now. According to Elon Musk himself, Tesla has already allocated $10 billion for its development.

Tesla must now demonstrate that it can bring a service to market that competes with these two giants. In both cases, it took regulators years of experimentation and research to gradually unlock their capabilities. Overcoming serious obstacles along the way.

Elon Musk believes that by 2027 he will receive the go-ahead to operate his robotaxi.

Photo | Tesla

In Hatak | Elon Musk has a long history of promising things that seem impossible, and Tesla’s robotaxi is another one of them.