Tesla’s reveal of a robo-taxi designed as a low-slung, two-seater, sporty coupe — quite the opposite of a typical taxi with room for several passengers and luggage — has flummoxed investors and analysts.
CEO Elon Musk served up the cool design for the prototype of the Tesla robo-taxi, dubbed Cybercab, at a much-hyped event near Los Angeles late on Thursday. These will go into production some time in 2026 and cost less than US$30 000 a pop, he said.
But in true Musk style, he skipped over expectations of how a two-seater robo-taxi would serve the needs of families headed to a restaurant or to the airport, or if he expected these to appeal only to a niche clientele. Investors jeered the design and the lack of financial detail, with Tesla stocks tumbling 9% on Wall Street on Friday.
“When you think of a cab, you think of something that’s going to carry more than two people,” said Jonathan Elfalan, vehicle testing director for the automotive website Edmunds.com. “Making this a two-seat-only car is very perplexing.”
Tesla did not respond to an e-mail seeking comment.
Experts said robo-taxis would best emulate regular taxis with plenty of room, a tall design and sliding doors. Musk did showcase a futuristic robo-van that could seat up to 20 people but did not say when that would be available.
The market for two-door robo-taxis would be very limited, said Sandeep Rao, a senior researcher at Leverage Shares, an investment management company with assets of about $1-billion, including in Tesla.
Two-door vehicles account for just 2% of car sales in the US, excluding SUVs and bakkies, according to data from analytics firm JD Power.
Cheaper
Musk said he wanted to make robo-taxis cheaper than mass transit to operate and predicted an operating cost of $0.20/mile over time for the Cybercab. But he did not say how quickly Tesla could mass-produce Cybercabs and secure regulatory approvals, or how it could beat Alphabet’s Waymo, which already operates robo-taxis in some US cities.
Waymo has a fleet of about 700 Jaguar Land Rover cars that fit four passengers, same as the seating capacity in Amazon’s Zoox robo-taxis. Waymo’s former CEO, John Krafcik, said Tesla’s design looked “more playful than serious”, and that the two-door configuration posed challenges for older passengers and those with disabilities.
Read: Tesla’s ‘toothless’ robo-taxi reveal
Delivering the robo-taxi and capturing a still nascent and tightly regulated market will be critical for Tesla.
Musk this year scrapped plans to build a smaller, cheaper vehicle amid slowing EV demand and shifted focus to the advancing Tesla’s autonomy ambitions. The robo-taxi business could catapult Tesla’s valuation to $5-trillion, he has said, from about $700-billion now.
“Two-seaters have been proposed for decades as commuter vehicles. They just haven’t taken off,” said Sam Fiorani, vice president at research firm AutoForecast Solutions. Tesla will eventually need to build larger robo-taxis, he said.
Blake Anderson, senior investment analyst at Carson Group, a Tesla investor, said that if the Cybercab is supposed to be a lower-cost, mass-market model to widen Tesla’s appeal, the two-seat design doesn’t make sense.
“It’s probably a way that they can introduce something quick to market,” he said. — Abhirup Roy and Chris Kirkham, with Norihiko Shirouzu, (c) 2024 Reuters
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