Elon Musk is ready to promote Tesla as a robotaxi company

• Elon Musk has a big task this week: convincing investors that Tesla is more than just a car company.
• The Tesla boss will lead Tesla's Robotaxi Day on Thursday and share updates on self-driving cars.
• This comes at a time when Tesla's revenue has been declining.

Over its nearly 100-year history, the Warner Bros. studio in Burbank, California, has set the stage for some of America's most famous stories. This could be the case again as Elon Musk prepares to use the studio lot to tell a different story: Tesla is more than just a car company.

On Thursday, the billionaire Tesla boss will take center stage at the historic site in California, hosting Robotaxi Day. The long-awaited event – originally scheduled for August – is intended to reinforce the electric vehicle maker's claim that it is a technology company first and an automotive company second.

Increasingly, Musk is positioning Tesla not only as a company focused on accelerating the transition to clean energy, similar to traditional automakers, but also as one that plans to become a leader in artificial intelligence, robotics and autonomous vehicles.

Musk did his part to create the hype by posting a poster on social media about the event titled “We, Robot,” while claiming that the day would be “a day for the history books.” But as Musk prepares to reveal much of his vision for Tesla's future, he faces a situation with a lot at stake.

Tesla's high-risk pivot

Musk has given investors clear signals over the years that he intends to develop Tesla into something more than just an electric vehicle maker.

In 2019, the head of electric vehicles at Tesla's then-palo Alto headquarters told shareholders that he was confident that a fleet of 1 million driverless robotaxis would be roaming the streets and ferrying passengers by 2020. Even though he missed that deadline, he pushed Tesla into other areas.

In July, Musk wrote on Optimus.

More broadly, Musk could see humanoid robots and driverless cars as a way for Tesla to generate value from AI, the hyped technology that is firmly on Silicon Valley's agenda after Sam Altman, Musk's co-founder of OpenAI and Nemesis, in late 2022 ChatGPT published.

It's not just Musk's belief that Tesla can take advantage of a broader opportunity through robots and AI. Andrej Karpathy, Tesla's former AI director, said on a recent episode of the No Priors podcast that he doesn't think Tesla is a car company; In his view, “cars are basically robots,” he said. Meanwhile, Wedbush analyst Dan Ives said in July: “Tesla's AI story could be worth more than $1 trillion and is the most undervalued AI name.”

What is crucial, however, is the timing of Tesla's robotaxi push. It comes at a difficult time for Elon Inc. On the one hand, Tesla has been unable to escape the selling pressure weighing on the broader electric vehicle market.

In the first half of the year, Tesla generated revenue of $46.8 billion, compared to $48.3 billion in the same period last year. While Tesla posted a 6.4% year-over-year increase in third-quarter deliveries, its value is still over $600 billion below the $1.2 trillion peak it reached in November 2021.

Caspar Rawles, chief data officer at Benchmark Mineral Intelligence, an industry firm focused on electric vehicle market pricing and supply chain data, said he expects EV growth to continue over the long term, but acknowledged recent macroeconomic headwinds led to a slowdown.

“You've seen higher interest rates, inflation, all sorts of aftereffects of the pandemic,” Rawles told Business Insider. “Sales of electric vehicles have grown much faster than traditional internal combustion engine vehicles; they just don’t grow as fast as people thought.”

Reactions to Musk's overall brand have become more intense as Tesla's shareholder base has become divided following his controversial transformation of Twitter into X and his support of former President Donald Trump over his leadership.

“Elon bought Twitter and decided to become a global leader for the right-wing country of Elonville,” said Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a Tesla shareholder.

Gerber told BI that while he thought electric vehicles were a business that could be “wonderfully profitable” – something that has made the case for investing in Tesla in previous years – he felt far less confident, as far as the robotaxi pivot is concerned.

This is primarily because Musk will be entering a market where the competition has a head start. Waymo, owned by Google's parent company Alphabet, partnered with Uber last year. BYD, a Chinese electric vehicle maker, has also partnered with Uber to offer “autonomous vehicles” to customers worldwide, it said in a July press release.

In China, Tesla's largest market outside the US, local internet giant Baidu already has a robotaxi fleet called Apollo Go in use, which will be launched in Wuhan in 2022. It aggressively lures consumers with high subsidies, which translate into dirt-cheap fares.

“Robotaxis could theoretically be profitable as long as there isn’t a lot of competition,” Gerber told BI. “The problem is that it exists and it’s already on the way.”

The question also remains as to how confident regulators are about the safety of robotaxis. Last year, GM-owned Cruise self-driving company suffered reputational damage following accidents involving its vehicles. Incidents like this have a domino effect on perceptions of the broader autonomous vehicle space, including Tesla's robotaxis.

That's especially true because experts believe the fully realized version of Musk's robotaxi ambitions will pose technical challenges. Paul Miller, senior analyst at Forrester, said that fully autonomous driving “should enable a vehicle to go virtually anywhere a human driver can go, on any type of road and in any weather.”

“It's easier to allow cars to drive themselves on certain types of roads, in known locations and under certain conditions,” he said ahead of Tesla's Robotaxi Day.

So it's clear that Musk has a big story to tell on Thursday. Under the lights of Hollywood, he hopes investors will be as willing to believe in it as he is.