Tesla Ride-Hailing: TechCrunch Mobility Analysis

TechCrunch Mobility Update: Tesla's Shifting Focus

Welcome to TechCrunch Mobility, your go-to source for the latest news and perspectives on the evolving world of transportation. Subscribe now for free by clicking TechCrunch Mobility!

Elon Musk's Strategic Positioning

Elon Musk, CEO of Tesla, currently faces a challenging situation. He has actively encouraged investors to perceive Tesla as a leading AI and robotics innovator, rather than simply an electric vehicle manufacturer.

However, the company’s primary revenue stream continues to be generated by its electric cars.

Advanced EVs and Driver Assistance

Tesla’s electric vehicles are undeniably sophisticated, particularly regarding their foundational vehicle architecture and software capabilities.

The company’s driver-assistance system, Full Self-Driving Supervised – operational on both highways and city streets with mandatory driver attention – is widely regarded as one of the most advanced available.

Despite these advancements, Musk envisions self-driving cars and humanoid robots as the definitive representation of an AI and robotics enterprise. Currently, neither of these technologies exist at a substantial production scale.

Robotaxi Initiatives and Current Limitations

Tesla’s initial significant move in this direction occurred in June with the launch of a limited robotaxi service in Austin, Texas.

These Robotaxi-branded vehicles, accessible through a customer-facing application, feature a Tesla employee present in the front passenger seat.

This implementation remains distant from Musk’s original concept of a “general solution” enabling Tesla owners to generate income by leasing their vehicles as robotaxis.

Pressure for Progress and Upcoming Plans

Time is of the essence, and Musk needs to demonstrate further progress.

At a minimum, he must offer compelling previews of future launches to maintain shareholder confidence.

This necessity likely underlies Tesla’s current foray into ride-hailing services in California.

California Launch and Regulatory Hurdles

Earlier this month, Musk indicated that Tesla would initiate a robotaxi service in the Bay Area “within a month or two,” contingent upon securing the necessary regulatory approvals.

However, Tesla has not yet submitted applications for the permits required to operate a robotaxi service.

Verification with the California DMV, the agency responsible for overseeing driverless testing, confirmed that Tesla has not filed the required permit applications. (A DMV spokesperson confirmed a meeting with Tesla to discuss autonomous vehicle testing plans within the state.)

Ride-Hailing Service and Misconceptions

Consequently, Tesla has launched a ride-hailing service in the Bay Area, with users frequently referring to the vehicles as robotaxis.

It’s crucial to understand that these vehicles are not operating autonomously.

(Autonomous operation would constitute a violation of existing regulations.) Tesla currently lacks the permits to conduct anything beyond employing its own personnel to transport individuals around the Bay Area in its EV fleet.

There is no autonomous driving involved in any capacity. A detailed explanation of the permits Tesla requires can be found here.

The Underlying Motivation

This ride-hailing launch prompts the question: what is the rationale behind this move?

The answer, in my assessment, lies in managing public perception.

While individuals – including Kimbal Musk, Elon Musk’s brother and a Tesla board member – may characterize these vehicles as robotaxis, it’s important to reiterate they are not self-driving.

Scout and the NADA

Information circulating from various sources indicates that the National Automobile Dealers Association (NADA) is currently concentrating its attention on Scout, the electric vehicle venture spun out of VW Group, and its intentions regarding direct vehicle sales.

The dealer association has historically voiced opposition to the direct sales approach. However, a key distinction exists between Scout and other companies utilizing this model, such as Tesla, Rivian, and Lucid.

Unlike those EV manufacturers, Scout benefits from being affiliated with a traditional automotive manufacturer that already possesses a well-developed and extensive dealer network.

This connection to a legacy automaker presents a unique dynamic in the ongoing debate surrounding direct sales versus the traditional dealership model.

Do you have information to share? Reach out to Kirsten Korosec at kirsten.korosec@techcrunch.com or via Signal at kkorosec.07, Sean O’Kane at sean.okane@techcrunch.com or Rebecca Bellan at rebecca.bellan@techcrunch.com.

Recent Transactions in the Tech and Logistics Sectors

Reflecting on the latter part of 2023, logistics firm Flexport garnered significant attention within Silicon Valley. This was partly due to the disagreements between founder Ryan Petersen and former CEO Dave Clark, and also due to their acquisition of Convoy.

An update on this situation is now available. Flexport has completed the sale of the Convoy platform to DAT Freight & Analytics. While the financial details remain confidential, the company asserts that it has realized a substantial profit on its investment.

Flexport did not publicly reveal the initial cost of acquiring Convoy’s technology. However, reports at the time estimated the figure to be $16 million – considerably less than Convoy’s prior valuation of $3.8 billion. Recent reporting indicates that Flexport received $250 million from the sale of the Convoy platform.

Notable transactions that also came to light this week include…

Funding and Investment Highlights

AIR, an Israeli company focused on the development of electric vertical takeoff and landing (eVTOL) aircraft, secured $23 million in Series A funding. Entrée Capital spearheaded the round, with continued support from Dr. Shmuel Harlap, an early investor in Mobileye.

LG Innotek, a subsidiary of South Korea’s LG Group specializing in components and materials, is making a strategic investment of up to $50 million in Aeva. This investment will result in LG Innotek holding approximately a 6% equity stake in the U.S.-based lidar company.

This investment is part of a larger manufacturing collaboration between the two organizations. It also signifies Aeva’s expansion into new markets, including consumer electronics, robotics, and industrial automation.

Recent Developments in Autonomous Vehicle Technology and Transportation

Aurora recently highlighted significant advancements within its second-quarter earnings report. Currently, the company is operating a fleet of three autonomous trucks for commercial purposes along the Dallas-Houston corridor. By the close of June, these vehicles had accumulated over 20,000 miles driven without human intervention.

A pilot program is underway utilizing driverless trucks on a 15-hour route. This route extends from Aurora’s facility in Fort Worth, Texas, to a newly established terminal in Phoenix, with operations primarily occurring during nighttime hours. CEO Chris Urmson shared insights regarding the company’s future objectives.

The Boring Company, founded by Elon Musk, is proposing the construction of a 10-mile “loop” system in Nashville. This system is intended to connect the city’s downtown area with both its convention center and airport. Funding for this project will be provided by The Boring Company and its private sector collaborators, whose identities remain undisclosed.

It’s important to note that this initiative marks the beginning of a public evaluation process to determine optimal routes, meaning construction will not commence immediately.

Ford is scheduled to unveil further details concerning its forthcoming line of affordable electric vehicles at an event in Kentucky on August 11th. As reported by senior journalist Sean O’Kane, the company is presenting ambitious plans for these vehicles.

Joby Aviation has entered into an agreement with L3Harris Technologies, a prominent defense contractor, to “explore opportunities” for the development of a novel aircraft category. Specifically, they aim to create a gas-turbine hybrid vertical take-off and landing (VTOL) aircraft capable of autonomous flight, intended for defense-related applications.

This hybrid VTOL aircraft will be engineered based on Joby’s existing S4 aircraft platform. While not a formal contract, this collaboration signifies progress in Joby’s strategy to penetrate both the defense and consumer markets.

Uber is continuing to forge partnerships with numerous autonomous vehicle companies. Conversely, Lyft is actively pursuing independent agreements. Lyft announced plans to integrate autonomous shuttles manufactured by Benteler Group, an Austrian company, into its network beginning in late 2026.

These shuttles will be deployed in collaboration with U.S. cities and airport authorities.

Waymo intends to launch a robotaxi service in Dallas next year, and is partnering with Avis Budget Group to oversee the management of its autonomous vehicle fleet. Separately, two Waymo robotaxis were involved in a collision at a company staging area in Phoenix this week.

This incident occurred despite Waymo’s rapid expansion into new urban areas, indicating that challenges remain in perfecting the technology. Waymo has stated that an investigation into the cause of the accident is underway.

WeRide, a Chinese autonomous vehicle company, has been granted an autonomous driving permit by Saudi Arabia. The company currently possesses similar permits in China, the United Arab Emirates, Singapore, France, and the United States.

Tesla's Ambitions in Ride-Hailing and Waymo's Perspective

Tekedra Mawakana, the co-CEO of Waymo, is scheduled to participate in a comprehensive discussion at the Disrupt Stage.

This conversation will focus on the present status of autonomous vehicles (AVs) and future projections for the industry.

TechCrunch Disrupt 2025 Event Details

TechCrunch Disrupt 2025 is set to take place from October 27th to 29th.

The event’s location will be Moscone West in San Francisco, providing a central hub for industry leaders and innovators.

The Rise of Autonomous Vehicle Technology

The development of self-driving technology is rapidly evolving, with companies like Tesla and Waymo at the forefront.

Tesla’s recent moves into the ride-hailing sector represent a significant challenge and opportunity within the AV landscape.

Key Discussion Points with Tekedra Mawakana

• The current challenges facing the widespread adoption of AVs.
• Waymo’s strategic approach to navigating the autonomous vehicle market.
• Insights into the future of transportation and the role of autonomous technology.

Mawakana’s insights will offer valuable perspectives on the competitive dynamics and technological advancements shaping the future of mobility.

Her participation promises a thought-provoking session for attendees interested in the autonomous vehicle industry.