Analysis:Why Tesla's robotaxi launch was the easy part
Tesla finally has a robotaxi. Now comes the hard part.
The electric-vehicle maker deployed its first-ever driverless cabs in Austin, Texas, on Sunday in a small-scale test of carefully monitored Model Y vehicles. Next, the company faces the steep challenge of executing on CEO Elon Musk's ambition to refine the software and upload it to millions of Teslas within a year or so.
Such a rapid expansion will prove extremely difficult, about a dozen industry analysts and autonomous-vehicle technology experts told Reuters. These observers expressed a range of views about Tesla's prospects but all cautioned against assuming a light-speed robotaxi rollout.
Some pointed to advantages Tesla might exploit to overtake rivals including Alphabet's Waymo and a host of Chinese auto and tech companies. Tesla has mass-manufacturing capacity, and it pioneered remote software updates it can use for self-driving upgrades. The automaker also does not use sensors such as radar and lidar like Waymo and most rivals; instead, it depends solely on cameras and artificial intelligence.
'A rollout could be really quick. If the software works, Tesla robotaxi could drive any road in the world,' said Seth Goldstein, a Morningstar senior equity analyst, while cautioning that Tesla is still 'testing the product.'
In Austin, Tesla launched a choreographed experiment involving maybe a dozen cars, operating in limited geography, with safety monitors in the front passenger seat; remote 'teleoperators'; plans to avoid bad weather; and hand-picked pro-Tesla influencers as passengers.
For years, Musk has said Tesla would soon operate its own autonomous ride-hailing service and also turn any Tesla, new or used, into a cash-generating robotaxi for its customers. That will be 'orders of magnitude' more difficult than testing in Austin, said Bryant Walker Smith, a University of South Carolina law professor focused on autonomous-driving regulation.
'It's like announcing that, 'I'm going to Mars' and then, you know, going to Cleveland,' Smith said.
Musk has said Tesla will reach Mars, in that metaphor, quite quickly: "I predict that there will be millions of Teslas operating fully autonomously in the second half of next year," he said in April.
Musk and Tesla did not respond to requests for comment. Tesla shares ended 8.2 per cent higher at $348.68 on Monday on investor enthusiasm over the robotaxi launch.
Given Tesla's AI-dependent approach, its challenge will be machine-training robotaxis to handle complex traffic 'edge cases,' said Philip Koopman, a Carnegie Mellon University computer-engineering professor and autonomous-technology expert. That could take many years.
'Look, how long has it taken Waymo?' Koopman asked. 'There's no reason to believe Tesla will be any faster.'
LONG SLOG
Waymo's self-driving efforts date back to 2009, when Google started its self-driving car project. An egg-shaped prototype took its first ride on public streets in 2015 – also in Austin.
Waymo has taken since then to build a 1,500-robotaxi fleet in select cities. A Waymo spokesperson said it plans to add 2,000 more vehicles by the end of 2026.
Some analysts believe Tesla can expand faster, in part because Waymo has helped pave the way by overcoming regulatory and technical challenges.
'Waymo and other pioneers have helped to drive regulatory change and have made riders, pedestrians and other road users aware of autonomous vehicles,' said Paul Miller, an analyst at market-research firm Forrester.
Being a mass-manufacturer also helps Tesla, Miller said. Waymo buys Jaguar I-PACE SUVs and outfits them with more expensive sensors and technology than Tesla integrates into its vehicles.
Waymo declined to comment on Tesla's robotaxi-expansion potential. The company's former CEO, John Krafcik, remains skeptical. The precautions Tesla employed in Austin reveal it does not have confidence its technology is safe at scale, Krafcik said.
'And they shouldn't,' he said. 'It's not as safe as it needs to be, and falls well short of the robust approach and well-documented safety that Waymo has demonstrated.'
'WRONG SIDE' OF THE ROAD
Tesla's go-fast strategy could actually slow its progress and that of the autonomous-vehicle industry if it undermines public trust, some analysts said. Tesla has historically faced legal and regulatory trouble involving its Full Self-Driving (FSD) driver-assistance system, which is not fully autonomous.
In one recent federal safety probe into Tesla, investigators are examining FSD's role in crashes – some fatal – involving rain or other inclement weather that interferes with the system's cameras. Before the Austin test, Musk posted on his social-media platform, X, that the robotaxis' technology would differ little from any Tesla, aside from a software update: 'These are unmodified Tesla cars coming straight from the factory, meaning that every Tesla,' he wrote, 'is capable of unsupervised self-driving!'
The automaker invited Tesla-friendly influencers to take its first robotaxi rides, and they generally cheered the experience. One social-media video posted by a robotaxi passenger, however, showed the vehicle proceeding through a four-lane intersection with a traffic light – and into the wrong lane, for about six seconds. No oncoming traffic was in the lane at the time.
'Obviously we're on the wrong side of the double-yellow line here,' said the passenger, Rob Maurer, in a video narration of the experience he posted on X, noting that he felt safe but that the car behind him honked at the 'confusing maneuver."
Maurer did not respond to requests for comment. Reuters verified the location of the video by matching the surrounding buildings, business and street signs to the intersection of West Riverside Drive and Barton Springs Road in Austin.
Separately, a Reuters witness followed another Tesla robotaxi and measured its speed as it traveled at between 40 and 45 mph in a 35 mph zone on First Street, adjacent to the Texas School for the Deaf. A sign warned to watch for deaf pedestrians.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
3 hours ago
- CNA
Wall St ends sharply higher, S&P 500 nears record high as Middle East tensions cool
NEW YORK: US stocks rallied more than 1 per cent on Tuesday (Jun 24) as investors welcomed a fragile truce with Israel and Iran while parsing Federal Reserve Chair Jerome Powell's congressional testimony for clues regarding the US central bank's path forward. All three major US stock indexes closed with their second straight session of solid gains following US missile strikes on Iran's uranium enrichment assets. The benchmark S&P 500 grew within striking distance of its all-time closing high reached on Feb 19. Late Monday, US President Donald Trump announced a cease-fire agreement, which Israel appeared to have violated. Still, investors viewed the cease-fire rhetoric as a sign of de-escalating tensions. "The bulls are out of their bucking shoots," said Greg Bassuk, Chief Executive Officer at AXS Investments in New York. "The cease-fire really adding fire to the stock market rally. We believe investors are wagering that calm in the Middle East is really a boon for stocks even as it weighs down bonds and oil prices." Crude prices slid on waning supply concerns related to the conflict, dragging energy shares lower. Powell, speaking before the US House of Representatives Financial Services Committee, reiterated his view that rate cuts can wait until the economic effects of tariff increases are better known, adding "we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance." Financial markets have been pricing in a more than 20 per cent likelihood that the Fed will lower its key interest rate at the conclusion of its July policy meeting, and a near 70 per cent probability that its first rate cut will land in September. On the economic front, consumer confidence deteriorated this month, with pessimism toward the jobs market falling to its lowest level since March 2021. "Consumer confidence was down," Bassuk added. "And as we see these economic data points casting a shadow over the strength of the U.S. economy, it's another factor pointing toward greater likelihood of Fed rate cuts this year." The Commerce Department is expected to release its final take on first-quarter GDP on Thursday, and on Friday its closely watched Personal Consumption Expenditures (PCE) report will shed light on inflation, consumer spending and income growth. According to preliminary data, the S&P 500 .SPX gained 67.34 points, or 1.12 per cent, to end at 6,092.51 points, while the Nasdaq Composite gained 283.62 points, or 1.45 per cent, to 19,914.59. The Dow Jones Industrial Average rose 510.19 points, or 1.20 per cent, to 43,091.97.
CNA
4 hours ago
- CNA
Dollar drops on Middle East optimism, euro highest since 2021
NEW YORK :The dollar fell on Tuesday and the euro rose to its highest level since October 2021 after a ceasefire between Iran and Israel was announced, even as Federal Reserve Chair Jerome Powell repeated that he expects inflation to begin rising this summer. The ceasefire began to take hold on Tuesday under pressure from U.S. President Donald Trump, raising hopes for an end to the biggest ever military confrontation between the Middle East arch-foes. "The market right now is unwinding the Middle East trade," said Adam Button, chief currency analyst at ForexLive in Toronto. The euro and yen gained as oil prices tumbled. The European Union and Japan rely heavily on imports of oil and liquefied natural gas, while the U.S. is a net exporter. The single currency was last up 0.38 per cent at $1.162 after earlier reaching $1.1641. The dollar weakened 1 per cent to 144.68 Japanese yen. Risk sensitive assets including the Australian dollar also gained on improving risk sentiment. The Aussie was last up 0.68 per cent versus the greenback at $0.6503. Sterling rose 0.77 per cent to $1.3626 and reached $1.3648, the highest since January 2022. The U.S. currency fell even after Powell said in testimony before U.S. Congress that he and many at the Fed expect inflation to start rising soon, and that the central bank was in no rush to ease borrowing costs in the meantime. Traders were particularly attuned to his remarks after two other Fed policymakers indicated they support near-term rate cuts, citing concerns over the labor market and falling expectations about a resurgence in inflation. "The market was looking for a strong pushback regarding the possibility of a rate cut but Powell continues to sit on the fence," said Button. "The big debate at the Fed right now is in the jobs market. Waller and Bowman are saying they're seeing signs of softness, whereas Powell said we don't see weakness in the labor market," Button said. Fed Vice Chair for Supervision Michelle Bowman said Monday the time to cut interest rates appears imminent while Fed Governor Christopher Waller on Friday that the Fed should consider cutting interest rates at its next meeting. U.S. President Donald Trump said on Tuesday that interest rates in the country should be lowered by at least two to three percentage points. Fed funds futures traders are pricing in 60 basis points of cuts this year, up from around 46 basis points before Waller's comments on Friday. That indicates expectations that two 25-basis-points in cuts are certain, with a rising chance of a third reduction. A cut at the Fed's July 29-30 meeting continues to be seen as very unlikely, with the first cut expected in September. If the economy deteriorates and the Fed cuts interest rates faster than currently expected that could be very negative for the dollar, said Vassili Serebriakov, an FX strategist at UBS in New York. However, "if it doesn't, if the Fed doesn't cut until September and then delivers just two cuts this year, we're probably looking at some dollar weakness, but it's unlikely to be very significant, especially for pairs like dollar/yen, because the dollar still just benefits from carry quite a bit." Data on Tuesday showed that U.S. consumer confidence unexpectedly deteriorated in June as households worried about business conditions and employment prospects over the next six months.
CNA
5 hours ago
- CNA
US Fed chair signals no rush for rate cuts despite Trump pressure
WASHINGTON: US Federal Reserve Chair Jerome Powell told lawmakers Tuesday (Jun 24) that the central bank can afford to wait for the impact of tariffs before deciding on further interest rate cuts, despite President Donald Trump's calls to slash levels. The Fed has a duty to prevent a one-time spike in prices from becoming an "ongoing inflation problem," Powell said before the House Committee on Financial Services. "For the time being, we are well-positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance," he added. His comments came after two Fed officials - Christopher Waller and Michelle Bowman - recently suggested policymakers could cut rates as early as July. Powell declined to comment when asked about Waller's views on a pathway to rate reductions. But he said officials could be inclined to lower rates sooner if inflation were weaker than expected or if the labour market deteriorated. The Fed has held the benchmark lending rate steady since its last reduction in December, bringing the level to a range between 4.25 per cent and 4.50 per cent. Last week, Powell told reporters that it would make smarter decisions if it waited to understand how Trump's tariffs impact the economy. The Fed chief said Tuesday that it should see the duties' impact on consumer prices in June and July numbers, adding that a smaller effect than anticipated is also important for policymaking. Hours before Powell's testimony, Trump again urged the chair of the independent Fed to slash rates, saying these should be "at least two to three points lower" as inflation remains benign. "I hope Congress really works this very dumb, hardheaded person, over," Trump wrote on his Truth Social platform. On Trump's criticism, Powell said: "We always do what we think is the right thing to do, and you know, we live with the consequences." New York Fed President John Williams separately supported maintaining the central bank's monetary policy stance. "Much of the soft data we've seen in recent months captures the heightened uncertainty about the path of the economy," he said in remarks prepared for a Tuesday event. "But it's too early to say what the future trajectory of the hard data will be." "STILL STRONG" Powell maintained Tuesday that it is unclear how concerns over US trade policies could affect future spending and investment. "Increases in tariffs this year are likely to push up prices and weigh on economic activity," he said. For now, Powell said: "Despite elevated uncertainty, the economy is in a solid position." "I wouldn't want to point to a particular meeting," he noted of the possibility of a July rate cut. "I don't think we need to be in any rush, because the economy is still strong." Given that "credibility on inflation is hard-won," he said, officials are proceeding cautiously. While inflation has eased, it remains above the bank's longer-run two per cent goal. Since returning to the presidency, Trump has imposed a 10 per cent tariff on almost all trading partners and steeper rates on imports of steel, aluminium and autos. Economists warn levies could fuel inflation and hit economic growth, although widespread effects have so far been muted. This is partly because Trump has backed off or postponed his most punishing salvos. Businesses also stockpiled inventory in anticipation of the duties, avoiding immediate price hikes. Although the Fed has pencilled in two rate cuts this year, there is growing divergence among policymakers about whether it can lower rates at all in 2025. Powell said a "significant majority" of the Fed's rate-setting committee still feels it will be appropriate to reduce rates later this year. He pushed back on narratives of the dollar's decline as "premature" too, expressing belief that it remains the top safe-haven currency.
