Are you looking forward to Tesla Robotaxi? Learn More About the Anticipated Launch

Imagine yourself sitting in a Tesla taxi, or wait, did you just think of the Model 3? With a crown on it? Or maybe the aluminum alloy version of the Model 3.

Tesla is preparing to unveil its Robotaxi this Thursday, and everyone is eager to see what it will look like, whether Tesla will reveal its commercialization strategy, and what wild timeline Elon Musk might announce to boost Tesla’s stock.

The “We, Robot” event will take place at 7 p.m. Pacific Time at Warner Bros. Discovery Studios in Burbank, California.

Musk originally planned to launch the Robotaxi, which he also calls the Cybercab, on August 8, but it’s another deadline he set for himself and Tesla. A report from Reuters earlier this week revealed that Tesla shelved plans for a low-cost electric car, shifting resources to focus on autonomous taxis. Though Musk initially dismissed this as a lie, Tesla did lay off 10% of its workforce in the following weeks, citing the need to “prepare for the next stage of growth.” Musk stated that Tesla would go "all out" for self-driving. As expected, the launch was delayed to October after Musk requested “significant front-end design changes.”

Investors who support Tesla's self-driving vision have been eagerly waiting for the release of a Robotaxi. But the timing might not be ideal. Over the past year, Tesla’s profit margins have been hit due to scaling up Cybertruck production. The company’s Q3 deliveries were somewhat disappointing, and Tesla has recalled the Cybertruck five times this year alone.

Launching a new vehicle means more money spent on production lines, factory shutdowns, and other costly issues — things investors don’t want to hear. Whether this event is all hype or has some real substance, we’ll find out soon.

A Cybercab Prototype

What we’re most expecting is the prototype of a new concept car, which would be Tesla’s first since the Cybertruck was announced in November 2019.

Credit: Walter Isaacson’s biography of Elon Musk.

Musk has referred to the autonomous taxi as the Cybercab, confirming a design idea revealed in Isaacson’s biography last year: a two-door, two-seat compact vehicle in the style of the Cybertruck, with sharp edges and a stainless steel finish. It may even lack a steering wheel or pedals. According to Isaacson's book, despite opposition from Tesla engineers, Musk remained determined to push this vehicle to market.

Since this design doesn’t meet federal safety standards, Tesla may face regulatory hurdles, which Musk could use as an excuse if the car struggles to reach the market.

Smoke and Mirrors?

Credit: Getty Images

Tesla typically hosts big unveilings at its own factories, so holding this event at a Hollywood studio is a change that highlights Musk’s flair for showmanship. The studio is open for public tours, so visitors — mostly Tesla shareholders and superfans — will likely be dazzled by iconic movie sets from “Batman,” “Friends,” “Gilmore Girls,” “The Big Bang Theory,” “Harry Potter,” and others.

It also gives Tesla access to large sound stages and sets, including areas resembling suburban streets and small downtowns. This controlled environment could be ideal for demonstrating the autonomous Cybercab — a closed space with no traffic, where the car can drive itself at low speeds.

We think the demonstration might involve the ride-hailing app Tesla hinted at during its Q1 earnings call in April.

Other vehicle and product announcements

Credit: Tesla

The event is titled “We, Robot,” a nod to Isaac Asimov’s sci-fi short story series I, Robot, which explored the relationship between robots and humans. Some believe Tesla might also update the audience on its humanoid robot, Optimus. Asimov's stories revolved around the “Three Laws of Robotics,” which prioritize human safety: 1) A robot may not harm a human, or through inaction, allow a human to come to harm; 2) A robot must obey orders given by humans unless it conflicts with the first law; 3) A robot must protect its own existence, as long as it doesn’t violate the first two laws. These principles could tie directly into autonomous driving.

According to Deepwater Asset Management, in addition to the Cybercab prototype, Tesla might preview its $25,000 electric vehicle (though not the actual prototype), which fans call the Model 2. Analysts Gene Munster and Brian Baker expect the Model 2 will look and feel similar to the Cybercab, based on Tesla’s previous statements that the two would share a platform.

The firm also speculates that Tesla might reveal more details about the Cybervan, an autonomous passenger vehicle that could revolutionize public transit. This prediction is based on Tesla’s March 2023 investor report, which showed a lineup of current and future models, including a van-sized vehicle.

Some Potential Wildcards

Building a Robotaxi is one thing; commercializing it is another. Tesla may be able to rely on the uniqueness of its vehicles and the company's overall fan power to entice customers to use a ride hailing service, but many won't want to turn to a service that may be less than reliable at launch.

One uncertain prediction we have is that Tesla may announce a partnership with YouTuber, which has proven that its existing global ride-hailing platform is attractive to self-driving car companies. Over the past few weeks, YouBuy has been quick to sign up self-driving companies, including Waymo, Cruise, Wayve, and others. While Musk seems to want to go it alone, a partnership could be the best way to commercialize these cars.

Another possible uncertainty is that McDonald's is involved in some way - according to a post the fast-food chain made last week, “chat's about to pop off10.10,” Musk's response was a laughing and crying emoji - so we could be in for a Thursday to see a McDonald's self-delivery demo or announcement.

What we don’t expect to see

There will undoubtedly be a lot of hype and discussion about Musk's vision for the future of autonomous driving. During this time, Musk may make a case for autonomous vehicles that mirrors Uber’s argument for ride-sharing a decade ago — hailing a self-driving car will be so easy and affordable that people won’t need to own their own cars.

It’s a compelling vision, but we don’t expect a clear commercialization plan to be revealed on Thursday.

In the past, Musk has claimed that today’s Teslas on the road could become fully autonomous through software updates, allowing owners to add their cars to Tesla’s ride-hailing app and rent them out to earn extra income (why does this slogan sound so familiar?). Tesla has stated that it would take 25% to 30% of the revenue from these services. In areas where not enough people share their cars, the automaker would deploy a dedicated fleet of Robotaxis.

Musk has promised fully self-driving Teslas for years, but none have materialized yet. While Tesla has made progress with its advanced driver assistance system, called Full Self-Driving (FSD), the technology is still not fully autonomous. It requires a human driver to stay attentive behind the wheel and take over when necessary.

This could explain why Adam Jonas from Morgan Stanley, a notable Tesla optimist, expects Tesla to adopt a “dual approach” for autonomous vehicles. He predicts there will be a “supervised” robo-taxi service with human oversight, along with a fully autonomous app-based Cybercab, which might become commercially operational by late 2025 or 2026.

Regarding the production of the Cybercab itself, analysts from Deepwater Asset Management pointed out that there’s often a delay between Tesla unveiling a product and ramping up production. For the Model Y, the gap was at least 10 months, while it took 48 months for the Cybertruck and 79 months (and counting) for the Semi. Tesla delivered a small number of Semis in December 2022 but has yet to achieve full-scale production.

“This suggests that production of any vehicle announced in August wouldn’t start until at least June 2025,” Deepwater wrote.

Since the Robotaxi launch has been delayed, Tesla has the opportunity to make “significant changes,” so the product is likely still far from being ready for mass production.