Tesla Robotaxi unveiling: expectations are low, could Tesla overdeliver?
Expectations appear to be quite low for Tesla’s Robotaxi unveiling on Thursday. Could Tesla surprise us?
On Thursday, Tesla is holding its ‘We, Robot’ event, which it previously described as its ‘Robotaxi unveiling’.
The automaker is expected to unveil an electric vehicle dedicated to self-driving. CEO Elon Musk has hinted that it will not have a steering wheel or pedals.
While this can be exciting on its own for some, those who have followed Tesla’s ‘Full Self-Driving’ (FSD) effort for years are a little more skeptical.
Tesla’s Supervised FSD has fallen short of even short-term goals stated by the CEO Elon Musk with the system still being at only about 120 miles between critical disengagement 3 years into the program:
It makes its long-term goal, which is for the system to work unsupervised as a robotaxi, even less believable.
Tesla fans and Wall Street analysts are trying to understand how this new dedicated robotaxi will fit into those plans, as Tesla has previously focused on making its existing consumer vehicles self-driving.
Wall Street Expectations
There’s not a ton of hype for the event on Wall Street.
Bernstein analyst Toni Sacconaghi commented on the event:
“While Tesla is clearly focused on launching a robotaxi, Waymo and Cruise are already operating robotaxis in the U.S. today. The available data is clearly imperfect, but as of today Tesla appears to be lagging behind the leaders in the space.”
Guggenheim Securities Director of Automotive Equity Research Ronald Jewsikow thinks that Tesla would need to show a “credible path to robotaxi commercialization in the next 12 to 24 months” to satisfy the street and he doesn’t think that’s likely:
Ultimately, there are a lot of boxes that have to be checked, and we think that a real credible path to robotaxi commercialization in the next 12 to 24 months is extremely unlikely to come out of this event.
As for William Blair analyst Jed Dorsheimer, he expects a “sell the news” situation:
“I would not be surprised, and fully expect, the stock to pull back on the event. The trend for most of Tesla’s analyst days/big announcements is the stock runs into those as expectations rise…then there is a disappointment.”
Finally, Adam Jonas of Morgan Stanley, who is undoubtedly the most bullish Wall Street analyst on Tesla, believes that the automaker will clearly separate the robotaxi/Cybercab program with its existing FSD:
“Potential initial commercial introduction could be late 2025 or 2026. It is our expectation that Tesla will offer a ‘dual’ approach with respect to autonomous ridesharing: (1) the fully autonomous app-based cybercab and (2) a ‘supervised’ autonomous/FSD rideshare service.”
While this is a possibility, it offers its own challenges as it might undermine its current strategy, which it has been selling to customers for 8 years.
Electrek’s Take
I think Jonas is probably right. I think the core of the event is going to be the Robotaxi/Cybercab unveiling.
We will see the actual vehicle, but the strategy for making it autonomous will be more interesting.
Is Tesla going to base the hardware on the same system found in its consumer vehicle? The answer to that question has great implications for its ability to deliver on its self-driving promises for millions of vehicles already on the road.
It could be the same, or similar, hardware, but will Tesla start using a mapped and geo-fenced approach to offer self-driving rideshares in some markets with its new Robotaxi in order to utilize it sooner?
I think that’s a real possibility, but that also has implications regarding Tesla’s current effort.
Due to Tesla’s resistance to releasing any data regarding its FSD program and the crowdsource data looking awful, I have doubts that Tesla can show anything game-changing on the self-driving front at the event.
Where Tesla could potentially overdeliver on expectations at the event is with new vehicles.
We know that Tesla has been developing two new, cheaper vehicles based on the Model 3 and Model Y, with plans to bring them to market as soon as next year.
If that’s the case, I would expect an unveiling pretty soon. Therefore, this event is a potential opportunity.
I think that could be more meaningful than a Cybercab, which would either deliver the same thing Waymo has been doing for years or be dependent on Tesla’s FSD progress, which doesn’t seem capable of delivering anything that is not supervised for a few more years.
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Environment
Toyota the EV battery supplier? Honda will use them to power up its 400,000 hybrids in the US
Toyota is now a battery supplier? That’s the plan. Honda will use Toyota’s batteries to power up its around 400,000 hybrids sold in the US.
Toyota will supply batteries for Honda hybrids in the US
Toyota’s $14 billion battery plant in North Carolina is ready for business. The facility will begin shipping out batteries next month, and it looks like Toyota already has its first customer.
According to a new Nikkei report, starting in fiscal 2025, Toyota will supply batteries for the roughly 400,000 Honda hybrids sold in the US.
Honda currently uses batteries from China and Japan for vehicles sold in the US, but the company is (like most) preparing for changes under Trump.
Honda’s electrified vehicles, including EVs and hybrids, accounted for over a quarter of US sales last year. The company sold over 308,500 hybrids and 40,400 electric vehicles in the US in 2024. The batteries will likely be used in the CR-V and other Honda hybrid vehicles.
Earlier this month, an extra 10% tariff on imports from China took effect. And that’s on top of the 10% imposed in February.
With more expected, including a 25% increase in vehicles imported from Japan, automakers are tightening up their supply chains.
A 25% tariff on Japanese vehicles, up from 2.5% currently, is estimated to cost the six major Japanese automakers about $20 billion in the US.
Tariffs on imports from Mexico and Canada could cost Honda roughly $4.7 billion alone. Teaming up with Toyota to use its batteries for its hybrids is part of Japan’s broader global plans to ween off dependence on China and others for batteries and other emerging tech.
The new US plant, Toyota Battery Manufacturing North Carolina (TBMC), is over seven million square feet, or about the size of 121 football fields.
As Toyota’s first in-house battery factory outside of Japan, the plant could be a game changer as Trump’s tariffs take effect. Securing Honda as a buyer will already help Toyota cut costs as it ramps up output.
Toyota plans to ramp up electrified vehicle (EV, PHEV, and hybrid) sales in North America from around 40% last year to 80% by 2030.
Electrek’s Take
Trump’s tariffs are already causing havoc, with nearly every automaker warning that they put the US further behind. Overseas automakers are not the only ones feeling the heat, either.
The “Big Three,” GM, Ford, and Jeep maker Stellantis all build vehicles in Canada and Mexico. GM cut output at its plant in Mexico in January, where the electric Chevy Equinox, Blazer, and Honda Prologue are made. Stellantis halted operations at its Brampton Assembly Plant in Canada last month, where it was expected to launch the Jeep Compass EV production. What’s next?
For Toyota, it looks like its $14 billion bet to build batteries in the US is already paying off. Now, we just need it to introduce more EVs.
After unveiling three new electric SUVs in Europe last week, including the updated bZ4X, Toyota hinted more is on the way for the US. Check back soon for updates.
What do you think? Do you want to see more Toyota EVs in the US, like the new C-HR+? Let us know your thoughts in the comments.
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Environment
If Musk wants to sell Tesla cars to conservatives, Tesla needs stores and service in red states
Elon Musk wants to sell Tesla cars to conservatives, but if that’s the strategy, the automaker should start with having stores and service centers in red states and rural areas.
It’s no secret that Elon Musk’s approval ratings with progressives have been plummeting over the last few years and even more so in the previous few months.
Since he has control over Tesla and he is the only official spokesperson since he let go of the PR department in 2020, the CEO is dragging the automaker along for the ride.
This is a problem for Tesla as Democrats are much more likely to buy electric vehicles than Republicans:
Tesla’s sales have been crumbling over the last few months, and after the stock crashed 15% last Monday, President Trump held a controversial commercial for Tesla with Musk on the steps of the White House on Tuesday.
A day later, it was reported that Musk plans to give Trump another $100 million in political donations.
It was an apparent attempt to try to promote Tesla to Trump’s fans: conservatives.
Based on a Tesla inventory check and new order delivery timeline, we reported that the Trump ad appeared to have little to no impact on the demand for Tesla vehicles.
It could be that people see through Musk and Trump’s quid pro quo and, therefore, don’t value Trump’s “Tessler” endorsement seriously. Still, there’s also a more practical reason why Trump’s fans and conservatives generally don’t buy more Tesla vehicles: the locations of Tesla’s stores and service centers (hat tip to Ben).
Even if some Trump fans were interested in buying a Tesla after the White House commercial last week, they might have been turned off by the idea of having to drive several hours to a store or service center.
Tesla does not have stores or service centers in Alabama, Arkansas, North and South Dakota, Kansas, Montana, Nebraska, or Wyoming.
In some cases, it’s not entirely Tesla’s fault, as some of these states have laws against Tesla’s direct sale models. They force automakers to go through third-party franchise dealerships. This is an abuse of old state laws aimed at protecting dealers against unfair competition from the automakers they represent.
Car dealer lobbies use their influence on state legislatures to use these laws to block Tesla, Rivian, Lucid, and other automakers who never had franchise dealerships from operating their own stores and service centers.
But on top of not having locations in several red states, Tesla also primarily has locations in urban areas, whereas conservatives disproportionally live in rural areas.
The automaker has several dead zones and doesn’t operate locations in smaller cities and towns where there are several Ford, GM, Toyota, and other car dealers:
While it certainly does happen, it’s hard to convince someone to buy a car if they have to drive several hours to pick it up and have it serviced.
Electrek’s Take
In short, it’s not only harder to convince conservatives, on average, to buy an electric vehicle, but Tesla is also not correctly set up to sell and service cars in conservative regions of the US.
Though, I think that’s a small part of the problem.
Cars are not supposed to be political.
Even if Tesla successfully converted a significant percentage of conservatives to electric vehicles, it wouldn’t stop the company’s brand destruction.
Tesla’s reputation amongst Democrats and independents has sharply decreased over the last few years, and especially over the last few months, and that’s thanks to Elon Musk alienating them.
It’s tough to be a successful consumer product company when you have alienated 50% or so of your market.
Tesla is basically becoming the MyPillow of Trump’s second term.
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