Elon Musk is putting Tesla all-in on Robotaxi
Riding the AI wave, Elon Musk is betting Tesla’s business on its self-driving effort, including Robotaxi, at the cost of other programs critical to its core business.
At the same time, the CEO is threatening not to build AI products at Tesla.
Tesla has been investing in autonomous driving for years, but you can argue that it has had little positive impact on its business to date. For the most part, Tesla’s business, financially speaking, is selling electric vehicles, specifically Model Y.
The automaker has been very good at that, with Model Y becoming the best-selling vehicle in the world.
You would think that Tesla would continue that way and build a broader lineup of electric vehicles to continue to grow, but it didn’t play out that way.
As we previously reported, Cybertruck was a mistake for Tesla. The program could still prove successful, but Tesla’s focus on the vehicle, which is somewhat limited in terms of volume, with 250,000 units per year planned, has resulted in Tesla’s current “gap in growth waves.”
Instead of focusing on Tesla’s next-generation vehicles, which are expected to bring the company back to growth, the automaker brought the Cybertruck to market, which is cool, but it won’t meaningfully contribute to the company’s growth.
Tesla going all-in on Robotaxi
Tesla has been hedging its bets with its next-generation vehicles, which are built with a new manufacturing method the automaker calls “unboxed.” The company planned to build two vehicles on the new platform:
- a model cheaper and smaller than Model 3, sometimes being referred as the “$25,000 Tesla” or “Model 2”
- Tesla Robotaxi: a new vehicle designed from the ground-up for self-driving.
However, we reported yesterday that we were able to confirm that CEO Elon Musk postponed Tesla’s cheaper model in favor of Robotaxi.
That is a huge bet as Tesla now absolutely needs to solve self-driving in order to keep growing at any significant pace, as it would not have a car program geared toward growth for years otherwise.
Musk said that Tesla would be spending “several billions of dollars” on NVIDIA compute power this year to train its self-driving system.
We reported yesterday that Tesla is aiming to complete a massive data center to train Full Self-Driving at Gigafactory Texas by the end of August. That’s just a few weeks after Tesla plans to unveil its ‘Robotaxi’.
Electrek’s Take
With the postponed cheaper model, Tesla will be looking at a minimum of three years without significant growth if it doesn’t achieve self-driving.
That’s why I am saying that Elon Musk is putting Tesla all-in on self-driving and Robotaxi.
I get it, to a degree. AI is moving at incredible speeds right now, and there’s this feeling that technologies will move a lot faster because of it. Many tech leaders are rushing to link their companies to it.
I’ve had FSD Beta in my car for 2 years now, and it didn’t feel to me like FSD was improving at AI speeds, if at all, but I’ve had v12 for a week now, and I have to admit that this is a meaningful improvement.
It is giving me some hope that Tesla could start improving the system at AI speeds. Potentially.
But with all that said, I think Tesla could have still hedged its bets and developed the cheaper vehicle side-by-side — even if it meant Robotaxi would be a bit behind this new accelerated schedule.
It is still risky.
For Tesla shareholders, it’s also confusing. Elon is taking all this risk, betting everything on AI helping Tesla solve self-driving, saying that “Tesla is now an AI company”, and at the same time, he threatened Tesla shareholders that he would not build AI products at Tesla if he doesn’t 25% control over the company’s shares, which he would have he didn’t sell billions of dollars worth of Tesla shares to buy Twitter.
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Tesla has opened orders for the Model Y Long Range RWD for $45,000 in the US. It’s the new entry-level Model Y following the design refresh earlier this year.
Since launching the updated Model Y earlier this year, Tesla has only offered the best-selling electric SUV in a single Long-Range AWD configuration.
First, it was as a fully-loaded $60,000 Launch Edition, and last month, it started deliveries of the regular Model Y AWD starting at $49,000.
As we recently noted, Tesla didn’t have much of an order backlog for the new Model Y in the US, and it has already started gathering new Model Y AWD in inventory just weeks after launching the vehicle.
Tesla even started offering subsidized financing rates on the new SUV this weekend.
Now, the automaker is starting to take orders for the new Model Y Long Range RWD
The new trim starts at $44,990 and enables 357 miles of range – an extra 30 miles over the AWD version.
However, due to its single motor powertrain, the lower-priced version is slightly slower with a 0-60 mph acceleration in 5.4 seconds rather than 4.6 seconds.
The automaker says that deliveries of the new version will start in the US in the next 3 to 5 weeks. It launched the new Model Y RWD in Europe weeks ago.
Tesla also offers a Standard Range RWD in Europe and China for even cheaper, and deliveries have already started in China.
Electrek’s Take
Tesla appears to have waited to open orders for the Model Y RWD in the US to optimize demand for the Long Range AWD.
But now it needs a cheaper model to sustain demand at the current production rate.
In the coming weeks, it will start building a mix of RWD and AWD in Fremont and Austin to
Interestingly, Tesla currently only offers the subsidized 1.99% financing rate on the Model Y Long Range AWD. I would assume that Tesla plans to take advantage of the boost in demand that the cheaper model will create.
However, US buyers probably won’t have to wait more than a few weeks before Tesla starts to offer lower interest rates on all versions, like it already does in Europe and China.
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![Big Mack, hydrogen Honda, and a ride in the Tesla Semi at ACT Expo 2025 [part 6]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/05/act-2025.jpg?resize=1200,628&quality=82&strip=all&ssl=1)
On today’s thrilling episode of Quick Charge, we’ve got some of the highlights of the 2025 ACT Expo, including the all-electric Windrose and Mack Pioneer Class 8s trucks, a hydrogen fuel sell [sic] from Honda, a fun charging surprise, and – after an eight year wait – we finally get a ride in the all-new (in 2017) Tesla Semi!
ACT Expo is North America’s premier clean truck and transport trade show – and for 2025 it was bigger than ever, with more exhibitors and more, more capable battery electric vehicles than ever. The downsides? NACFE have scored with their “messy middle” messaging, and the return of “clean diesel” talking points. We’ve got a brief rundown and links to all the details, below.
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If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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Abundance Energy, sonnen, and Energywell are teaming up to bring smarter, more resilient energy to Texas homes through a huge new virtual power plant (VPP) initiative.
By combining behind-the-meter home batteries, solar power, and advanced energy software, the trio is building a network of connected homes that can work together to support the grid. Customers who install sonnenConnect home batteries through Abundance Energy will now be part of a system that automatically stores and shares power when it’s needed most. That means lower electricity bills, better reliability during extreme weather, and a cleaner energy mix overall.
The VPP will cover all of ERCOT, with the primary focus in the greater Dallas-Fort Worth and Houston areas. Each home will have two 4.8kW/20kWh sonnenCore+20 battery units. The current customer base that will be enrolled in the VPP equals 60 MWh, and this will continue to grow each month. The VPP is already on track to replace Tesla as the largest virtual power plant in Texas by the end of 2026.
Here’s how it works: The batteries are continuously managed using Energywell’s Proton platform and sonnen’s smart VPP technology. This system monitors solar generation, customer energy use, and real-time electricity prices, and then decides when to charge or discharge each battery. Instead of just sitting idle, these batteries turn into mini power plants that can react to grid needs in real time.
And when thousands of batteries work together, they form a virtual power plant—a decentralized network that reduces the strain on the grid, especially during peak demand or power outages. Unlike traditional power plants, VPPs don’t burn fossil fuels. They use clean, stored electricity from homes and businesses, helping cut carbon emissions while keeping the lights on.
“Our mission is to empower homeowners with smarter, more sustainable energy solutions,” said Thomas Mandry, CEO of Abundance Energy. “This partnership delivers a new kind of VPP model that benefits customers and strengthens the Texas grid.”
Blake Richetta, CEO of sonnen, added, “With Abundance Energy and Energywell, we’re showing how everyday homeowners can become part of the solution to Texas’ energy challenges.”
As Texas continues to face grid reliability issues, especially in extreme heat or cold, this kind of flexible, customer-powered energy system will make homes more resilient and give customers more control over their power.
Read more: The US’s largest virtual power plant now runs on 75,000 home batteries
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
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