Can Elon Musk deliver on driverless cars as Tesla’s share price crashes?
Elon Musk is betting Tesla’s future on driverless cars, saying they will arrive by June, declaring that the company is ‘not even close’ to the ‘ragged edge of death’. But how realistic is his goal?
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Elon Musk says Tesla is “not even close” to the “ragged edge of death” despite earnings diving to the lowest levels in five years and facing protests and violence towards the electrical vehicle brand over his support of Donald Trump.
Musk faced a 90-minute earnings call on Wednesday morning (Australian time) where he outlined his big bet for the future: driverless cars.
It is not the first time he has talked up Tesla’s autonomous technology, saying it will catapult it to become the world’s most valuable company – worth more than the current five biggest. But what was different this time was Mr Musk placed a timeline of when his science fiction will become reality, moving the “financial needle in a significant way”.
“We expect to be selling fully autonomous rides in June in Austin. But the real question from a financial standpoint is when does it really become material and affect the bottom line of the company,” Musk told investors.
“That’s probably around the middle of next year, second half of next year.”
Musk will also cut back on his new role as head of Trump’s new Department of Government Efficiency to devote more time to Tesla, the share price of which has plunged more than 37 per cent since the start of the year as the company suffered unquantifiable brand damage from Musk’s political antics.
“Those who were receiving the wasteful dollars and the fraudulent dollars will try to attack me and our team and anything associated with me.”
But how realistic is Musk’s goal of delivering driverless cars at scale?
Most big car companies already have projects offering autonomous driving – albeit at varying degrees – in production.
Last June, Mercedes-Benz unveiled the next generation of adaptive cruise control, tapping into its self-driving car technology to allow motorists to automatically overtake slower vehicles.
Mercedes says it now has more than 40 driving assistance systems, and has secured regulator approval for its fully driverless cars in Germany, California and Nevada after partnering with Google to accelerate the rollout of its autonomous technology.
Rival BMW showcased at CES – the world’s biggest consumer electronics show – in Las Vegas last year its James Bond-inspired remote controlled valet parking. A driver left the car at a defined drop-off point, while autonomous driving kicked in, with the car finding a parking space. It could even then pick up the customer – just as valet would – from the defined pick-up point.
Ridesharing giant Uber is already offering driverless rides in Austin, announcing a partnership with Waymo six weeks ago that involves fully autonomous Jaguar I-Paces. Atlanta will be next off the rank.
So why does Musk need to wait until mid next year. The technology is here.
But what’s hindering a broader rollout is regulation, and Musk has had plenty of tussles with regulators.
As of late last year, Tesla and Musk’s social media platform X are subject to 20 investigations and reviews.
These include the US Securities and Exchange Commission probing Mr Musk’s takeover of Twitter in 2022, since rebranded X. The US National Highway Traffic Safety Administration is also investigating Tesla’s “full self-driving system” after reports of crashes in fog and dusty conditions.
“We’re going to great lengths to make this the safest car in the world and have the lowest accidents per mile. So we want to be very careful.
“Autonomy will be definitely safer than manual driving. It’s not enough that it needs to be just as safe. It needs to be meaningfully safer than cars manually driven. Can you go to sleep in your car and wake at your destination?
“I’m confident that will be available in many cities in the US by the end of this year.”
Musk also says that Tesla’s artificial intelligence technology has no peers, and despite its recent market turmoil, under Musk’s leadership Telsa shares have vaulted from $US1.28 to $US237.97 in the past 15 years.
Tesla’s system is camera-based and relies on a neural network, which is different from its competitors that use 3D mapping and remote sensing technology called LiDAR or light detection and ranging – emitting laser pulses to accurately determine a terrain and the objects within it.
“We’re the ones that made that pure AI solution with cameras. The car actually will listen for sirens and that kind of thing. It’s way more than just that expensive sensor suite,” Musk said.
“Even though Google is very good at AI, it is worth noting that Tesla has both an incredible AI software team and AI hardware chip design team. So I don’t see anyone being able to compete with Tesla at present.”
What also makes Tesla different is that Musk is betting on a future where people won’t buy cars, and he is laying the groundwork for the company’s ‘iPhone moment’.
“The reality is that in the future, most people are not going to buy cars. If you continue on that phone metaphor, I can remember the days of flip phones. There were 100 different flip phone designs. The mistake manufacturers made was to try to make different variants of a flip phone. They should have made an iPhone.
“Nokia, I think, at one point was the most valuable company in the world or close to it. They kept making flip phones – trying to find another mom, somebody who wants a different style, maybe this different colour or whatever it is. Nope. They just wanted a superintelligent phone.
“In the not too distant future, buying a gasoline car that is not autonomous will be like riding a horse using a flip phone.”
Originally published as Can Elon Musk deliver on driverless cars as Tesla’s share price crashes?
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