Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk said on Thursday that the company will deploy autonomous full self-driving (FSD) technology on its Model 3 and Model Y vehicles in Texas and California next year but there are seemingly multiple hurdles on the way before the company’s driverless vehicles can be deployed on public roads.
What Stands In The Way: The deployment of robotaxis hinges on technological advancement and regulatory approvals.
While Musk is optimistic that the company’s FSD can achieve autonomous driving with future software updates, he has previously expressed similar confidence.
As far back as 2019, Musk said that he was confident about Tesla having operational robotaxis by 2020. Several, including the founder of the Dawn Project and anti-FSD crusader Dan O’Dowd, are now skeptical about the new promises.
“Tonight Elon Musk said that Tesla drivers would soon be able to sleep at the wheel of unsupervised Full Self-Driving. This is the exact same promise he made in 2019 when he said FSD owners would be able to fall asleep and wake up at their destination by the end of 2020,” O’Dowd said in a statement to Benzinga.
While Tesla operated about 50 robotaxis, including 20 Cybercabs, without drivers on Thursday at the Cybercab unveiling event, they operated only within the Warner Bros. Discovery Inc.’s movie studio near Los Angeles, O’Dowd noted.
Tesla’s FSD requires active driver supervision on public roads.
The Analyst Take: Analysts are optimistic about Tesla’s Cybercab, praising its design and cost benefits, but they are concerned about its production timeline, which might not begin until 2026-2027.
This delay could challenge investor confidence despite the vehicle’s potential to drive revenue. Regulatory challenges and uncertainties also add to the skepticism around its market readiness.
Robotaxi Design May Pose Regulatory Concerns: Tesla unveiled two vehicles on Thursday for autonomous driving- a two-seater Cybercab and a 20-seater Robovan, neither of which has a steering wheel, pedals, or side mirrors.
While the vehicles stand out from an aesthetic standpoint, it would be difficult to receive approvals for deploying them on public roads without steering wheels or pedals given they are mandated by regulators for the sake of passenger safety.
Tesla’s FSD has previously been involved in at least two fatal accidents. However, Musk is of the opinion that robotaxis will be safer than human-driven vehicles given that it wouldn’t be distracted or tired.
Though General Motors’ Cruise previously planned to build a robotaxi of its own with no pedals called Origin, it scrapped the plan earlier this year and said it would instead focus on using its next generation of Chevrolet Bolt for autonomous driving operations.
The decision, GM CEO Mary Barra said in July, will address the “regulatory uncertainty” around the Origin with its “unique design” while also allowing for cutting costs at Cruise.
Alphabet Inc‘s Waymo is currently the major player offering autonomous rides in select cities across the U.S. Waymo, however, deploys its sensor suite on vehicles equipped with pedals and steering wheels and manufactured by other automakers, such as the Jaguar Land Rover, for use as robotaxis.
Tesla executive Ashok Elluswamy said in April that the company expects fewer regulatory hurdles for Tesla as other companies like Alphabet Inc. subsidiary Waymo have already cleared the path.
Earlier this week, Ark Invest analyst Tasha Keeney also expressed optimism that regulatory hurdles will pose less hindrance to Tesla’s robotaxi plans given that 40 states in the U.S. have either approved autonomous vehicles explicitly or not prohibited them.
However, the absence of mandated parts on the vehicle might pose an issue. Though Tesla unveiled the Cybertruck without a side view mirror in 2019, the vehicle now has them upon delivery, as regulations mandate it.
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Photo courtesy: Tesla