Elon Musk shows Tesla 'Robotaxi' that drives itself

After years of promises, Tesla on Thursday unveiled a car that the company's chief executive, Elon Musk, said could drive without human supervision. Mr. Musk said the car would add trillions of dollars to the company's stock market value and accelerate its growth.

The “robotaxis,” which Mr. Musk also referred to as a “cybercab,” would cost less than $30,000 and be available before 2027, he said. “I tend to be a little optimistic,” he admits.

The product, which does not have a steering wheel or pedals, is a prototype of a self-driving taxi that Mr. Musk has staked Tesla's future on.

Mr. Musk promised that the car, which appears to be made of stainless steel, will be able to take passengers to any destination without human intervention, a feat that other companies have achieved in places like Phoenix and San Francisco.

“You can fall asleep and wake up at your destination,” he said.

According to Mr. Musk, the much-anticipated unveiling ceremony at Warner Bros. Studios near Los Angeles started about an hour late, only after one of the invited guests suffered a medical emergency.

Tesla's existing vehicles, including the Model 3 sedan and Model Y sport utility vehicle, will be able to offer robotic taxi rides in Texas and California before the new car becomes available, Mr. Musk said.

But many experts doubt that such a Tesla taxi will hit the roads anytime soon. Mr Musk has claimed for several years that the company was months away from launching a robotaxi service. Also, the autonomous driving technology that Tesla offers today can make early mistakes, requiring drivers to intervene to avoid accidents or violate traffic laws.

Nevertheless, Mr. Musk's supporters and fans believe that the robotaxi will open up a profitable line of business that will more than offset Tesla's recent struggles in the electric car market, where it has lost market share to more established automakers. Mr Musk said people would be able to buy Robotoxy for personal use and earn extra money by allowing the vehicles to ferry passengers, the automotive equivalent of listing a home on Airbnb.

“This is a game changer,” Shai Natarajan, a partner at Mobility Impact Partners, a private equity firm that invests in sustainable transportation but does not own Tesla shares, said in an email after the event. “If this technology works well, it will completely change personal car ownership and mobility.”

But Ms Natarajan questioned whether Tesla's technology, which relies on cameras to navigate, would be able to work in any situation as Mr Musk had promised. Most other car manufacturers use laser sensors to detect people and objects.

Other analysts and autonomous driving experts said there was little evidence that Tesla was close to perfecting the technology and making a profit from it.

A vehicle capable of operating as a self-driving taxi is “still several years away, and numerous technical hurdles, safety tests and regulatory approvals still stand in the way,” Garrett Nelson, senior equity analyst at CFRA Research, said in a note. this week

For Tesla investors, whose shares are trading at roughly the same price as at the start of the year, the event had a lot to offer

Tesla's status as the world's most valuable car company was once based on Mr. Musk's claim that the company would sell 20 million cars a year by the end of the decade, double that of Toyota and more than 10 times that of Tesla. Sold last year.

Lately, as Tesla's sales growth has slowed, Mr. Musk has stopped emphasizing that goal and instead staked the company's future on self-driving technology. Those who don't believe in Tesla's ability to overcome the hurdles of fully autonomous driving “shouldn't be investors in the company,” Mr. Musk said in April.

Many analysts are skeptical that even if Tesla perfects the technology, it will be as profitable as Mr. Musk predicts. Tom Narayan, an analyst at RBC Capital Markets, estimates that self-driving taxis will account for $1.7 billion in vehicle sales worldwide in 2040. But Tesla will own only a fraction of the market, Mr. Narayan said

“It's not happening in large numbers anytime soon,” he added.

Tesla also showed off the latest version of its Optimus humanoid robot on Thursday. One film shows robots serving drinks, playing board games with children and unloading groceries from a car.

“It will be the biggest product of any kind,” Mr Musk said.

Amazingly, Tesla launched an autonomous “Robovan” capable of transporting 20 people. “We're going to build it,” Mr. Musk said. But the company has disappointed some investors who expected to see a prototype Tesla car that costs less than existing models. Tesla said such cars will be sold next year.

Tesla already sells a monthly subscription to a system it calls Supervised Full Self-Driving to owners of its electric vehicles. But the company says drivers using it must be ready to intervene at any moment if the software goes wrong.

A ride last week in a Tesla Model 3 equipped with the latest version of full self-driving suggests the company still has work to do.

The car's performance was impressive at times when driving through Manhattan and Queens. Pedestrians were courteous, once stopping near Rockaway Beach for two children who were walking off a sidewalk onto a four-lane road with no crosswalks or traffic signals.

But on many other occasions the car has avoided accidents or illegal maneuvers only because of driver intervention. The car was driven by Guy Mangiamel, director of vehicle testing for AMCI Testing, a Los Angeles-based research firm that evaluates vehicle performance for car companies and other customers.

With full self-driving engaged, the car gets confused in a tunnel between Manhattan and Queens, slowing dangerously in heavy traffic. In Manhattan's financial district, the car ran a red light. It attempted to make a left turn from the middle lane of Avenue of the Americas onto West 29th Street and would have been cut off by a police car if Mr. Mangiamele had not intervened.

Mr. Mangiamel, who has tested the software over hundreds of miles in various locations, called it an “incredible achievement” that nevertheless has “glaring flaws.”

Accidents attributed to previous versions of Tesla software have prompted numerous lawsuits and an investigation by the National Highway Traffic Safety Administration. The company says the technology doesn't adequately ensure that drivers stay focused. In April, it issued a report linking hundreds of accidents and at least 29 fatal crashes to the use of Tesla's driver-assistance systems.

Mr. Musk has long said that Tesla's vehicles will be able to drive without human intervention. His unfulfilled promises prompted a class-action lawsuit by the Oakland County, Mich., pension fund and other shareholders who claimed he misled them about the company's technology in violation of securities laws.

But a federal judge in California ruled in Tesla's favor last month, citing laws that allow executives to make optimistic statements even if they later prove untrue. The incumbent gives Mr. Musk a wide leeway.

Tesla isn't the only company pursuing self-driving taxis. In China, tech giant Baidu is testing autonomous taxis on public roads. Waymo, a subsidiary of Google's parent company, has been operating driverless taxi services for years. It recently said its cars are providing more than 100,000 rides per week in San Francisco, Phoenix and Los Angeles. Cruise, a unit of General Motors, recently resumed testing driverless taxis in San Francisco last year after one of its cars hit and dragged a pedestrian. And Zoox, owned by Amazon, is testing a driverless van with no steering wheel and plans to launch a paid service.

Analysts say it will likely take years for these companies or Tesla to operate a profitable taxi service in many urban areas. And even then a huge team of engineers, mechanics, cleaners and others would be needed to run such services.

“Elon's Robotaxi represents a potential paradigm shift in the transportation industry,” Carl Brauer, executive analyst at iSeeCars, a used car shopping site, said in a statement this week, “but it won't happen overnight.”