‘Confusing’ Cybercab robotaxi causes Tesla stocks to tumble
The practicality of Elon Musk’s two-seater taxi is being questioned
14 October 2024 - 12:23
bySAgency Staff
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Tesla’s robotaxi is a low-slung, two-seater, sporty coupe. Picture: SUPPLIED
Tesla’s robotaxi, designed as a low-slung, two-seater, sporty coupe — 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 robotaxi, called Cybercab, at a much-hyped event near Los Angeles last Thursday. They would go into production some time in 2026 and cost less than $30,000 (R522,825) each, he said.
But in true Musk style, he skipped over the expectations of how a two-seater robotaxi 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 email seeking comment.
Experts said robotaxis would best emulate regular taxis with plenty of room, a tall design and sliding doors. Musk did showcase a futuristic robovan that could seat up to 20 people but did not say when that would be available.
The market for two-door robotaxis would be very limited, said Sandeep Rao, a senior researcher at Leverage Shares, an investment management company with assets of about $1bn (R17.43bn), including in Tesla.
Two-door vehicles account for only 2% of car sales in the US, excluding SUVs and pickups, according to data from analytics firm JD Power.
Musk said he wanted to make robotaxis cheaper than mass transit to operate and predicted an operating cost of 20c per 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 robotaxis 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 robotaxis.
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.
Delivering the robotaxi and capturing a still nascent and tightly regulated market will be critical for Tesla.
In 2024 Musk scrapped plans to build a smaller, cheaper vehicle amid slowing electric vehicle (EV) demand and shifted focus to the advancing Tesla’s autonomy ambitions. The robotaxi business could catapult Tesla’s valuation to $5-trillion (R87.14-trillion), he has said, from about $700bn (R12.20-trillion).
“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 would eventually need to build larger robotaxis, he said.
Blake Anderson, senior investment analyst at Carson Group, a Tesla investor, said if the Cybercab was supposed to be a lower cost, mass market model to widen Tesla’s appeal, the two-seat design did not make sense.
“It’s probably a way they can introduce something quick to market,” he said.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
NEWS
‘Confusing’ Cybercab robotaxi causes Tesla stocks to tumble
The practicality of Elon Musk’s two-seater taxi is being questioned
Tesla’s robotaxi, designed as a low-slung, two-seater, sporty coupe — 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 robotaxi, called Cybercab, at a much-hyped event near Los Angeles last Thursday. They would go into production some time in 2026 and cost less than $30,000 (R522,825) each, he said.
But in true Musk style, he skipped over the expectations of how a two-seater robotaxi 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 email seeking comment.
Experts said robotaxis would best emulate regular taxis with plenty of room, a tall design and sliding doors. Musk did showcase a futuristic robovan that could seat up to 20 people but did not say when that would be available.
The market for two-door robotaxis would be very limited, said Sandeep Rao, a senior researcher at Leverage Shares, an investment management company with assets of about $1bn (R17.43bn), including in Tesla.
Two-door vehicles account for only 2% of car sales in the US, excluding SUVs and pickups, according to data from analytics firm JD Power.
Musk said he wanted to make robotaxis cheaper than mass transit to operate and predicted an operating cost of 20c per 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 robotaxis 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 robotaxis.
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.
Delivering the robotaxi and capturing a still nascent and tightly regulated market will be critical for Tesla.
In 2024 Musk scrapped plans to build a smaller, cheaper vehicle amid slowing electric vehicle (EV) demand and shifted focus to the advancing Tesla’s autonomy ambitions. The robotaxi business could catapult Tesla’s valuation to $5-trillion (R87.14-trillion), he has said, from about $700bn (R12.20-trillion).
“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 would eventually need to build larger robotaxis, he said.
Blake Anderson, senior investment analyst at Carson Group, a Tesla investor, said if the Cybercab was supposed to be a lower cost, mass market model to widen Tesla’s appeal, the two-seat design did not make sense.
“It’s probably a way they can introduce something quick to market,” he said.
Reuters
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