Tesla We Robot – Nothingburger!

Great visuals, no content.

• When the highlight of the show is wondering if it was a Cybercab malfunction that caused Mr Musk to start the show nearly an hour late, you know that not much happened.
• Tesla held its We, Robot event where Mr Musk spoke for about 20 minutes, said almost nothing that had not been said before, and teased two new vehicles one of which might get manufactured by 2027.
  • First, autonomous driving: where Tesla showed off its Cybercab for the first time which is a futuristic-looking Tesla with no controls.
  • Tesla hopes to start manufacturing this vehicle in 2026 (take with the usual bucket of salt) and said that it will also have fully autonomous vehicles driving in Texas and California cities in 2025.
  • What that means in practice is unknown as the definition of “unsupervised” can be a very grey area.
  • Mr Musk also went on to claim that just because Tesla cars collect more data than anyone else, this somehow means that its software can safely pilot a road vehicle in any circumstance.
  • He has made this claim before, and it carries as little water now as it did then.
  • The problem is the usual one in that these systems have no causal understanding of the world that they are trying to interpret meaning that when anything new or different turns up, they are flummoxed.
  • As roads are constantly changing this still happens far too often
  • Having more data than anyone else does not fix this problem and by the limited amount of empirical data that is available, Tesla is still behind Waymo, Cruise, Nebius and many of the Chinese players when it comes to autonomous driving.
  • Second, Cybercab and Robovan economics: where Mr Musk stated that the Cybercab should cost under $30,000 and where Tesla now thinks that the cost of a robotaxi will be $0.2 per mile.
  • This is 33% lower than the previous estimate of around $0.3 per mile which is frankly very surprising given that the US dollar has lost around 33% of its purchasing power since 2021.
  • RFM’s calculations have found that the expected cost has increased from $0.25 per mile to $0.32 per mile over the same period due to post-pandemic inflation.
  • Consequently, I am somewhat sceptical that this figure will ever be hit especially as this figure was given with zero evidence.
  • However, even RFM’s estimate still represents a very large reduction in transport cost meaning that if the technology can be made to work properly, it is likely to be rapidly adopted by Tesla and everyone else.
  • Third, Optimus Robot: Which is also expected to cost less than $30,000 and, to be fair to Tesla, has come a long way from the human prancing around in a robot suit and a robot that could barely stand up.
  • However, this is in no way unique to Tesla, and I am increasingly confident that many players have widely solved the problem of robots walking and navigating the human world.
  • This paves the way for a whole new industry, but the brains of the robots still need a lot of work before they can do all the housework.
  • Hence, I do see eventual demand for devices like this, but competition is going to be brutal as there are already numerous Chinese robots competently walking, jumping and getting back up after being pushed or knocked over.
• There was almost nothing in this session that has not been said before and shuttling partisan attendees around a city fabricated in a Warner Brothers studio is a very far cry from the reality.
• The only way that Tesla is going to make a high return on robotaxis is if it has the market to itself for an extended period of time which requires that it gets to market first.
• Tesla is already far from first and so I continue to think that robotaxi economics will be a bloodbath of cutthroat competition.
• This is not what is in Tesla’s business plan which Mr Musk freely admits is central to the investment case.
• This is why I continue to think that Tesla remains substantially overvalued by its own standard meaning that I am still not inclined to own it.
• There are much better and much cheaper plays on autonomy to be had.