Tesla’s valuation has been impressive recently, closing at an all-time high of $489.88 earlier this month and still approaching that astronomical figure as of this writing. Tesla bulls, especially Dan Ives of Wedbush capital, say that this is because Tesla is close to successfully releasing robotaxis, and that Tesla’s stock price may rise to $800 next year.
Thursday’s New York Times report reads like a valiant attempt to make sense of anyone who believes the Wedbush Tesla narrative. It won’t work, because Tesla is selling a pretty wild myth that wasn’t mentioned in the Times piece.
What is important in the Times report is the observation that in Austin, the city that is a proof of concept for Tesla as a Robocar manufacturer, approximately 30 self-driving taxis are said to have been on the roads since June, which is a very bad number compared to Waymo’s 200 in the same city since March. The source the Times linked to for the Tesla figures is a site called teslarobotaxitracker.com, run by an Austin-based robotaxi enthusiast named Ethan McKanna.
And the Times points out that each of Tesla’s self-driving taxis with passengers still has human safety monitors—whereas Waymo’s fleet is unmonitored—at least inside the vehicle.
The Times is far from the first to say that Waymo is ahead of Tesla. Jeff Dean, a senior scientist at Google DeepMind—which shares parent company, Alphabet, with Waymo, tweeted earlier this month, “I don’t think Tesla has anywhere near the volume of autonomous miles that Waymo alone has (96M for Waymo, as of today). The safety data is compelling with Waymo.”
Elon Musk, CEO of Tesla, responded to Dean by making one of his famous predictions: “Waymo never stood a chance against Tesla. This will be obvious in hindsight.”
One problem with any Waymo-Tesla comparison right now, however, is that Waymo’s business is running into big holes, and it may be worth it. This past weekend, Waymo had to shut down its service in San Francisco when its cars slowed down at blackout stops. It turns out that Waymo’s lack of security drivers may have contributed to the problem, as the reason for its closure was an issue caused by the high volume of requests for Waymo’s software to get a human response.
But importantly, the bullish case for Tesla’s Robotaxi service doesn’t seem to be based on existing ride-hailing services that rely on Model Y vehicles as autonomous taxis. It is likely based on the mass release of a two-seater vehicle without a steering wheel or pedals called the Cybercab that Elon Musk unveiled in 2024, and which is said to be available for purchase by the end of 2026.
Cybercab’s supposed silver bullet is that people will obviously buy them, and use them for their transportation needs, but sometimes release them into the wild as robotic workers that do little or nothing. This will benefit Tesla in theory because it will depend on the operating system of the Tesla ecosystem, and Tesla will be cut, while car owners have to deal with charging, maintenance, insurance, cleaning, and all the other annoyances of owning a car.
And we know that Elon Musk has it in his head that he’ll get something like a million Cybercabs on the road—or at least some mix of hundreds of thousands of Model Y taxis alongside the Cybercab. We know this because if Tesla doesn’t roll out at least a million self-driving taxis, Elon Musk doesn’t get all of his $1 trillion dollar salary.
The Times piece is correct in quoting experts as saying that Tesla is “behind Waymo.” But it includes passages like this one that make near-religious faith in Tesla’s future earnings sound far more mysterious than it is:
Some analysts also doubt that driverless taxis will generate billions of dollars in revenue, as Mr. Musk predicted, or will be very profitable. For revenues to reach even hundreds of billions of dollars, more people will have to give up their cars to take taxis, which won’t happen anytime soon, said Michael Tyndall, an analyst at HSBC.
It’s not like the Times is comparing apples to oranges. It’s like they’re comparing noble apples with worms in them to magic apples from a wizard who says his apples can grant wishes, but no one can have them yet. It’s lovely and amazing to have super smart adults in the room who are willing to even ask to be rational. But hey, let’s all wait and see what the witch has in store for us.
