AP Photo/Alex Brandon
Tesla robotaxis are on their way to Austin in June, the company's CEO, Elon Musk, confirmed β and there could be 1,000 of the vehicles on the streets within just a few months.
"We'll start with probably 10 for a week, then increase it to 20, 30, 40," he said in an interview with CNBC on Tuesday. "It will probably be at 1,000 within a few months." He's previously said the ramp-up will be quick.
After the Austin rollout, Musk said he plans to expand the robotaxis to other cities, like San Francisco. By the end of 2026, Musk predicted there could be more than 1 million self-driving Teslas in the US.
In 2019, Musk said Tesla could have more than one million robotaxis by year's end, but that deadline came and went with Musk admitting that punctuality is not his "strong suit."
Texas and California, where autonomous Waymo cars are already on the road, have different regulations, and Tesla doesn't have full approval to launch its robotaxis in the Golden State.
"The approval process is very haphazard and sort of state-by-state, and sometimes city-by-city," Musk said. He said on Tuesday that it's crucial to set up nationwide regulations for self-driving cars.
The initial robotaxi launch in Austin will be highly limited, as Musk said on an April 22 earnings call. Tesla told a Morgan Stanley analyst that the service will operate on public roads and be invite-only.
The company also said many teleoperators will be available to help out. In robotaxi-speak, teleoperators typically mean that a remote employee can take over some level of control, usually when the autonomous driver gets stuck. Competitors Waymo and Zoox handle those types of situations slightly differently. It's not clear exactly how much control teleoperators will have during the Austin robotaxi launch.
Representatives from Tesla did not immediately respond to a request for comment from Business Insider.
Musk said during the interview that Tesla's robotaxis will be geo-fenced to specific parts of the Austin region after CNBC's David Faber pushed the CEO to respond to the outcome of Business Insider's test between Waymo and Tesla's Full Self-Driving Supervised software.
BI compared the companies' two self-driving technologies, and the Tesla ran a red light at a complex intersection in San Francisco.
Musk said BI's test "made no sense" but added that Tesla's robotaxis will avoid certain areas of Austin if the company deems it unsafe.
"We will geo-fence it," Musk said. "It's not going to take intersections unless we are highly confident it's going to do well with that intersection. Or it will just take a route around that intersection."
FT Live
Uber drivers are already sharing the road with robot rivals β and it could be about to change their jobs forever.
Senior VP Andrew Macdonald, who oversees Uber's autonomous vehicle operations, said that although human drivers would remain crucial to its ride-hailing business, they will soon face serious competition from self-driving taxis in city centers.
"I am almost certain that there will be more Uber drivers in 10 years, not less, because I think the world will move from individual car ownership to mobility as a service," said Macdonald, who was speaking during The Financial Times' Future of the Car conference.
"You'll continue to see that pie grow. But it will look different. You'll have urban cores where a large percentage of trips are serviced by autonomous vehicles. And to some, that will feel like very abrupt change," he added.
Uber has struck multiple deals with robotaxi companies to host their autonomous vehicles on its app over the past year.
The ride-hailing giant currently allows users to hail Waymo vehicles in Austin and Phoenix, with Atlanta set to follow later this year.
CEO Dara Khosrowshahi hailed the Austin launch as a major success in Uber's earnings call last week, telling analysts that the Waymo robotaxis in Austin were busier than "99%" of its human drivers.
Waymo
Uber's aggressive self-driving push β which has also seen it strike deals with Volkswagen, Wayve, and Chinese firms WeRide and Pony.AI β has come as its drivers express growing concern about the impact of driverless taxis on their livelihoods.
Uber drivers in Phoenix previously told Business Insider that their earnings are already being hurt by competition from Waymo, with some saying they intend to shun short-distance city center trips in favor of more profitable airport pickups.
Macdonald said that he didn't think the growth of the robotaxi industry was having an effect on driver earnings or opportunities just yet.
However, he added that he expected drivers would start feeling the impact soon in cities where robotaxis are becoming common, such as Austin, LA, and parts of China.
Macdonald said that Uber was pursuing a "hybrid marketplace" with a mix of human and robot drivers handling different types of routes.
"You can get an autonomous vehicle on the Uber platform in Austin today, we're available in 37 square miles," he said.
"If you're outside that area, you can get a human driver. If you're going from inside that area to outside, you can get a human driver. If you're going to the airport or on highways right now, it takes a human driver. There's a lot of value to having that hybrid," he added.
Macdonald said some of these journeys would "move more autonomous over time," but that the shift would create "other opportunities" for Uber drivers.
While autonomous vehicles are mostly limited to city centers and urban areas right now, Waymo is waiting on approval to offer airport drop-offs and pick-ups in multiple cities, and has said it is testing its robotaxis on freeways.
Despite this, the Uber executive believes there will be some situations that can only be handled by human drivers, such as bouts of extreme weather like blizzards or hailstorms.
"Even if an autonomous vehicle can handle 99% of weather cases, there's 1% of cases where maybe those cars need to pull over," said Macdonald.
"When you're running a fleet of 400 vehicles in a city, and all of them have to pull over at once, what happens to your ride-hailing service? For us, we send a bunch of humans to pick you up," he added.
Uber did not immediately respond to a request for comment from Business Insider.
WeRide
Chinese firm WeRide is the latest piece of Uber's robotaxi puzzle.
The two companies announced last week that WeRide's driverless taxis would be coming to the Uber app in 15 cities outside the US and China over the next five years. It did not reveal the list of cities.
The deal is the latest in a series that Uber has struck with self-driving companies, and WeRide's CEO told Business Insider that the expanded partnership would supercharge the development of WeRide's autonomous vehicles.
"Uber's scale is very important. There are some long-tail problems, you have to have the scalability in order to find them," Tony Han told Business Insider.
For self-driving cars, "long-tail problems" refer to unusual scenarios that rarely show up in everyday driving, making them difficult to simulate.
Training robotaxis to deal with these 'edge case' situations can require massive vehicle fleets and thousands of miles of real-world driving.
It's a problem all robotaxi companies face β including Tesla's upcoming robotaxi service in Texas, with CEO Elon Musk telling investors last month the automaker's fleet was driving "all over Austin in circles" to identify edge cases before the June launch.
Han said operating its vehicles on the Uber app across multiple continents would give WeRide the chance to prove the safety of its technology, adding that the company has yet to record an accident in over 2,000 days of robotaxi operation.
WeRide
"This will just convince people that taking WeRide's products and robotaxi service is safe. And our goal is to make robotaxi safer than a human driver," said Han.
Founded in 2017, WeRide has ridden China's robotaxi boom to a $4 billion valuation, and is one of the few Chinese autonomous vehicle companies to operate beyond its home market.
The Guangzhou-based firm tests and operates a range of autonomous vehicles β including robotaxis, robovans, and robo-road sweepers β across 10 countries.
WeRide's expanded partnership with Uber, which also saw the ride-hailing giant invest an extra $100 million in the Chinese self-driving company, comes after the two companies teamed up to launch a robotaxi service in Abu Dhabi last year, with Dubai set to follow soon.
Han told BI that the Abu Dhabi robotaxi service had been a success, with the company "aggressively recruiting" local operational staff, and said the expansion would take a "phased approach" with several cities being added in Europe and the Middle East over the next five years.
"The deal with Uber gives us another layer of confidence, because Uber has already rolled out their car-hailing service in all of these countries," said Han.
"This will actually reduce our efforts to a large extent. We only need to focus on autonomous driving technology and relevant regulations. We don't need to worry too much about the car-hailing service part, about the user acquisition part," he added.
Han has worked in the autonomous vehicle industry in China and the US.
Prior to founding WeRide in 2017, he was a professor of computer engineering at the University of Missouri and worked in Silicon Valley as Baidu's chief scientist. He told BI that both the US and China have a wealth of technical knowledge and robotaxi know-how.
However, he added that China's robotaxi industry has at least two advantages over its Pacific rival β the country's booming EV industry, which Han said drives innovation and keeps costs down, and its famously chaotic roads.
"In China, the number of complicated scenarios offers a very good testing environment, which enables robust algorithm development for WeRide," Han said.
WeRide
WeRide is one of a handful of Chinese robotaxi firms with a permit to test its vehicles on public roads in California, but the company has no plans to begin commercial operations in the US anytime soon.
Earlier this year, the outgoing Biden administration finalized rules effectively banning Chinese vehicle software from the US, which also barred Chinese companies from testing robotaxis on US roads.
Asked about the new rules, Han said the company had no commercial operations in the US and was focused on markets in Europe, the Middle East, Singapore, and potentially Japan.
"We have already got our hands full. There are a lot of things we need to do in the Middle East and European market," he added.
China has seen an explosion in autonomous vehicle technology in recent years, with EV giants like BYD offering driver assist tech in nearly all their vehicles for free.
A recent survey by consulting firm AlixPartners found that more than half of the cars sold in China last year were equipped with advanced driver assistance systems (ADAS), which operate some vehicle functions but require driver supervision, compared to less than 40% in the US.
The robotaxi boom has hit a speed bump in recent months, however, with authorities issuing a sweeping overhaul of regulations after a fatal crash involving a Xiaomi EV in March.
Unlike BYD and Xiaomi, WeRide operates fully autonomous robotaxis. The company also has a deal with German firm Bosch to use its technology in driver assistance systems for passenger cars in China.
Han said that both robotaxis and ADAS-equipped vehicles needed to go through "a very thorough process" to ensure they were safe to operate.
"No matter if you are driving a private car or you are sitting in a robotaxi, we want human transportation to be much more reliable and much safer. So I think safety is always the priority," he said.
Robin Marchant/Getty Images for Uber and Waymo
Uber passengers in Austin seemingly can't get enough of Waymo's robotaxis, with the 100 or so Waymo vehicles operating on the Uber app already busier than the human drivers they share the road with.
"These approximately 100 vehicles are now busier than over 99% of all drivers in Austin in terms of completed trips per day," CEO Dara Khosrowshahi said in prepared remarks after Uber announced its first-quarter earnings on Wednesday.
Khosrowshahi said the two companies plan to scale their autonomous fleet in Austin to "hundreds" of Waymos in the coming months, ahead of the launch of Waymo's robotaxis on the Uber app in Atlanta later this year.
Thanks to its hands-off regulations, Austin has become a hotspot for autonomous vehicles.Β In March, Uber began offering Waymo vehicles exclusively on its app for the first time in the city.
The two companies will soon face competition from Tesla, which is due to launch its own robotaxi service in Austin in June.
Uber drivers in Austin previously told Business Insider they were concerned about the long-term impact of Waymo's arrival, while others in LA and Phoenix have said competition from the driverless taxis is already hurting earnings.
Uber has abandoned plans to build its own robotaxis in recent years in favor of partnering with a host of self-driving car companies.
The ride-hailer has struck deals with 18 autonomous vehicle companies to offer their vehicles on the Uber app, including Volkswagen and Waymo in the US and Chinese firms WeRide and Pony.AI in Europe and the Middle East.
In comments after Uber released its first quarter earnings, Khosrowshahi said self-driving cars were the "single greatest opportunity ahead for Uber," adding the company was "laser-focused" on adding as many robotaxis to its platform as possible.
Uber's earnings on Wednesday missed Wall Street's expectations for revenue. It reported $42.8 billion in revenue for the quarter, below the consensus forecast of $43.1 billion.
Rideshare booking growth also slowed, with the company's stock falling almost 5% in premarket trade on the back of the results.
Business Insider
Tesla and Waymo are locked in a race to build self-driving cars, but their Chinese rivals may be leaving them in the dust.
More than half of the cars sold in China last year were equipped with advanced driver assistance tech, compared to less than 40% in the US, according to data compiled by consulting firm AlixPartners.
The figures suggest China has built a sizable lead in the global race to deploy self-driving technology, with the gap appearing to widen over the past few years.
In 2021, around 24% of the cars sold in both the US and China were equipped with tech that allowed them to steer, accelerate, and brake autonomously, per AlixPartners analysis.
While Western firms like Tesla and Google-backed Waymo are expanding aggressively in the US, they face fierce competition from Chinese companies that have made major technological strides in recent years.
Last month, Tesla rival BYD announced it would install its 'God's Eye' driver assistance tech for free across nearly its entire range of electric and hybrid cars, including the $7,800 Seagull hatchback.
That move quickly turned self-driving technology into the latest battlefront in China's brutally competitive car market, with several automakers rushing to follow BYD's lead by offering driver assist systems for free.
The self-driving scramble has left Tesla, which began rolling out its own advanced driver assist software to Chinese customers who had paid an extra $8,800 in February, at a competitive disadvantage in its second-largest market.
"Complimentary intelligent-driving features are emerging as a key competitive tool, further distinguishing China-brand offerings from overseas offerings," said Yvette Zhang, a Partner in the Automotive and Industrial Practice at AlixPartners.
One key reason that China has been able to roll out self-driving technology quicker than the US is the former's massive tech talent pool.
Chinese tech giants such as Xiaomi and Huawei have branched out into the electric vehicle business in recent years, and a survey of 400 auto industry executives in the US, China, and the EU conducted by AlixPartners pinpointed the availability of AI and machine-learning talent in China as a key advantage, alongside proximity to microchip hubs and more efficient data processing.
"Chinese brands are leveraging unique advantages to pursue faster and cheaper intelligent-driving solutions that are 'good enough' to bring to market," said Stephen Dyer, Asia Leader of the Automotive and Industrial Practice at AlixPartners.
Dyer added that some global automakers were attempting to learn from Chinese firms by striking strategic partnerships with their rivals.
Last year, Volkswagen struck a deal with Chinese EV upstart Xpeng to collaborate on technology for future products, including assisted driving.
China's self-driving revolution has not been without its speed bumps.
Last month, an SU7 electric vehicle built by smartphone giant Xiaomi was involved in a fatal crash on a Chinese highway. Xiaomi confirmed at the time that Navigate on Autopilot, the company's intelligent driving system, was engaged before the incident took place, with the human driver taking over seconds before the crash.
Weeks after the accident, Chinese authorities tightened regulations governing autonomous driving technology, banning automakers from exaggerating the capabilities of assisted driving features and reportedly telling companies to avoid describing them as "self-driving" entirely.
Justin Sullivan/Getty Images
Elon Musk made some big, exciting promises to Tesla investors on the company's first-quarter earnings call Tuesday β but he said they won't start paying off until mid-2026 or later.
In the hours after Tesla reported, analysts said they were waiting for two things: a highly anticipated cheaper car and for Tesla's robotaxi to hit the market.
Tesla's robotaxi, which was unveiled in October, is a fully autonomous vehicle that could be hailed on a ride-sharing app like a cab. Tesla has also been teasing a cheaper car β without disclosing its model or features β since 2020.
Tesla missed expectations for the first quarter, reporting a 71% drop in profits and a 9% drop in revenue. Vehicle sales in particular suffered, with auto revenues down 20% year over year and vehicle deliveries down 13%.
The EV maker has faced protests, boycotts, and attacks in recent months over Musk's work with the White House DOGE office. Musk announced on the earnings call that he'd be stepping back from DOGE in May, good news to investors who had been concerned that Tesla wasn't getting enough of the billionaire's attention.
Tesla stock jumped about 7% after hours, but it is down 41% this year.
Cantor Fitzgerald analysts led by Andres Sheppard highlighted the robotaxi and cheaper model in a note following earnings. They added that regulatory approval for full self-driving and robotaxi remains a key risk for Tesla's stock price.
A more affordable model could open up Tesla's potential customer base and help the company compete internationally against low-cost Chinese EVs.
Thomas Monteiro, an analyst at Investing.com, said, "Tesla has room for significant improvement."
"If this is the worst it gets for Tesla, then certainly there must be some upside for the stock once tailwinds, such as the highly-awaited cheaper model and the Robotaxi, finally hit the market later this year," he said in a note following the earnings call.
Yun Mei, an EV analyst at China Great Wall Securities, emphasized the robotaxi business in an appearance on Bloomberg TV on Wednesday.
She said that she has "strong faith" in Tesla's ability to launch robotaxis because Musk's ownership of xAI gives Tesla a "first mover advantage" in the physical AI space. But she estimated that robotaxis would take around three years to pay off.
Tesla has declined offers to pair up with existing ride-hailing platforms like Uber to market its Cybercab business, which could delay its robotaxis becoming mainstream.
In a note published on the day the Cybercab was unveiled in October, Jefferies analysts wrote that Tesla may struggle without a partner like Uber or Lyft.
Tesla's biggest cheerleader said that these product launches require Musk's focus, which has recently been on DOGE.
"This quarter was a disaster," Wedbush analyst Dan Ives said in a Tuesday appearance on CNBC after Tesla's earnings.
"Everything that's going on here in terms of the opportunities around autonomous, lower cost vehicles, Cybercab, everything else β Musk needs to drive that," he added.
Ives was more positive about Musk's decision to spend less time on DOGE.
In a research note published after Tesla's analysts call, he hailed the move as a "turning point" for the company.
"Musk recommitting as CEO at Tesla and basically leaving his DOGE role over the next month is the biggest and best possible news Tesla investors could have heard last night," Ives wrote, adding that Tesla had got its "biggest asset" back ahead of the crucial robotaxi and affordable EV launches.
Musk also set some lofty goals for Tesla's autonomous vehicles and humanoid robots.
Tesla is trying to diversify as EV sales have struggled. Slowing EV sales were an issue for Tesla even before Musk's work with DOGE, in part because of increased competition and consumers opting for hybrids over fully electric vehicles.
Musk said he expects Tesla to have millions of fully autonomous Teslas on America's streets by the second half of next year.
Musk added that Tesla would "start to see the prosperity of autonomy take effect in a material way around the middle of next year" or the second half of next year.
The company has often missed target dates in the past, and Musk has previously acknowledged being overly optimistic about timelines.
Musk also said Tesla was making good progress on Optimus, its humanoid robot, and it expected to have thousands of Optimus robots working in Tesla factories by the end of the year. He said the company could be producing one million robots a year by 2029 or 2030.
Zoox, Amazonβs autonomous driving unit, has issued a voluntary recall for 258 vehicles due to issues with its autonomous driving system that could cause unexpected hard breaking. The recall follows a preliminary investigation from the National Highway Traffic Safety Administration (NHTSA) last May after the agency received two reports of incidents in which motorcyclists collided [β¦]
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