TESLA SAYS IT'S WORKING ON RIDE-HAILING. WE HAVE QUESTIONS.

Tesla said it's working on a ride-hailing service. But it's not clear yet what that actually means.

Tesla analysts, investors and fans have lots of big, thorny questions going into the company's first-quarter earnings call this evening. In particular, they want to know how exactly Tesla's reported pivot into the robotaxi business will actually play out. 

In its earnings report that dropped after Tuesday's closing bell, the automaker didn't address those concerns head-on. However, the shareholder deck notes that Tesla is "currently working on ride-hailing functionality that will be available in the future."

"We have been investing in the hardware and software ecosystems necessary to achieve vehicle autonomy and a ride-hailing service," Tesla said in its report. "We believe a scalable and profitable autonomy business can be realized through a vision-only architecture

with end-to-end neural networks, trained on billions of miles of real-world data."

It also published a preview of what that ride-hailing functionality may look like once integrated into the Tesla app. 

The renderings show a "Summon" button, presumably for ordering a taxi. One screen displays a temperature of 68 degrees. Maybe that means customers will be able to adjust the climate settings in their taxi before they get in. Who knows. The details are pretty scant here.  

Ever since Reuters reported that Tesla had scrapped plans to build a cheaper consumer vehicle and was prioritizing robotaxis instead, there's been a great deal of uncertainty swirling about the automaker's future. What would a robotaxi business look like? When would the vehicle actually be ready to deploy? How can Tesla expect to grow in the near term without expanding its product portfolio?

Many of these things are still up in the air. In its Q1 earnings release, Tesla said it's accelerating the launch timing of "new vehicles, including more affordable models."

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The allusion to a ride-hailing business seems to be Tesla's way of assuaging investors that there is indeed a plan behind the robotaxi. However, the earnings report raises plenty of questions too. Will the ride-hailing service work with existing Teslas? Or will it depend on Tesla developing a self-driving vehicle at long last? Will Tesla run the business independently? Or will Tesla owners be able to participate and earn some side income?

Musk has mentioned the notion of a Tesla-run autonomous taxi service in the past. He famously proclaimed that the company would have 1 million robotaxis on the road by 2020. He's also said that Tesla owners would someday be able to sit at home and earn passive income while their self-driving vehicles ventured out and picked up passengers. None of that has materialized, seeing as Tesla hasn't cracked the code for self-driving vehicles yet. 

Stay tuned. We may learn more on Tesla's earnings call this evening. 

Contact the author: tim.levin@insideevs.com

2024-04-23T21:33:35Z dg43tfdfdgfd