A Temu Waymo

Before we get started, take a minute a watch this. 

 Apologies to regular readers who have heard this all before, but just to review: Elon Musk is unique among the centibillionaires not just because of the size of his fortune, but because of its precariousness. His peers such as Jeff Bezos, Mark Zuckerberg, Bill Gates, and Warren Buffett hold enormous assets and have run tremendously profitable companies. Musk's wealth is almost entirely due to the most successful stock pump in history. By any reasonable standard, Tesla—and to a degree, SpaceX—should be worth one to two orders of magnitude less than they are currently valued at. Add to that the fact that he has used some of that highly inflated stock to secure loans and, while we don't know the exact terms, we do know that if the stock falls far enough, he will be facing some very ugly margin calls.

Imagine the world's largest castle—not just now, but largest ever—was actually nothing more than a huge bouncy house, and that the moment you stopped pumping air in, the magnificent walls and towering spires would start to lose their shape and collapse. That's Tesla.

You keep a stock inflated through stories. The original narrative that kept things going was that, having established a large early lead in the small but growing field of electric vehicles, Tesla would somehow manage to maintain that market share as EVs became the dominant form of automobile. But that story has since tipped into fantasy due to increased competition, a disappointing second generation of vehicles, Elon Musk's increasingly toxic brand, and—most of all—the fact that no car company could justify the valuation that Tesla now holds.

There are three stories now that keep the castle upright: robotaxis, humanoid robots, and the idea that the Trump administration would pump tens upon tens of billions of dollars into the company somehow. Just to be clear: to justify a market cap of over a trillion dollars, it's not enough that all three of these come true to some degree; they all have to come through at an extraordinary level. It is like a business plan that requires you to hit the lottery three times in a row.

With respect to those government contracts, it is safe to assume that Elon now regrets having called the president a pedophile. This loss of standing puts even more pressure on Musk to make increasingly incredible promises around the remaining two narratives that are still pumping in air.

Musk had to put on some kind of a show, and he especially needed to do something with robotaxis. This was a product he'd been promising for years, and his last event around the it had impressed no one. He needed something that could, by even the broadest stretch of the imagination, qualify as a product launch.

He did have some things working in his favor. Both investors and journalists have shown a tremendous willingness to give him the benefit of the doubt. As long as he came through with the bare minimum, they'd be inclined to even the past—and that's exactly what he did.

 It is difficult to overstate the extent to which the training wheels were on during this demo.

A tiny number of rides in a single, geofenced neighborhood that Tesla had been training on for weeks. Daytime rides —Teslas, being strictly camera-based (unlike Waymo), don't do well at night—with a carefully selected, invite-only crowd of hardcore boosters, an algorithm that avoided difficult routes, a safety monitor sitting in the passenger seat with their hand on the kill switch, and a remote operator ready to grab the controls for teleoperation if something went wrong.

And something certainly did go wrong. The question is will it be enough.

 

 

 Chris Isidore writing for CNN.

A small number of company-owned cars were used and they were existing Model Y vehicles — not Cybercabs, which are not yet allowed on roads, let alone produced on a mass scale. It was not even the most extensive robotaxi service in Austin — a joint effort between Uber and Waymo, the self-driving car unit of Google parent Alphabet, has been up and running in Austin since March.

But the Austin test pressed on regardless.

The rides were made available to a select group of Tesla fans, according to Dan Ives, a tech analyst with Wedbush Securities and an effusive Tesla bull, [If Dan Ives were to be trapped in a burning Tesla, his last words would be a "buy" recommendation. -- MP] and Joey Klender, who writes for the site Teslarati.com. Klender and a member of Ives’ team took multiple rides in a Tesla Model Y robotaxi on Sunday.

...

But it was not all smooth sailing, with multiple videos showing the car making mistakes. In one YouTube video, the robotaxi drove on the wrong side of the road after it attempted and abandoned a left turn, only to continue traveling down the street on the opposite side of a double yellow line before making the left turn on the following block. Fortunately, there were no vehicles driving on the other side of the road.

A separate YouTuber posted a video in which the robotaxi kept driving past its destination for several minutes as he tried to get it to pull over so he could get out.

“Please exit safely,” a screen in the rear seat of the car said, as it continued driving down the road. 

...

But the EV maker is playing a game of catch up. Waymo, a unit of Google parent Alphabet, has been providing paid rides since 2020, and now provides more than 250,000 rides a week to paying riders in Austin, Phoenix, Los Angeles and San Francisco. It soon plans to expand the service to Atlanta, Miami and Washington, DC.  

 

Given the ratio of support staff to robotaxi, Musk's claim that "Tesla will have hundreds of thousands of self-driving cars in the U.S. by the end of 2026," seems a bit dubious.

We need to discuss the concept of "beta"