TMTPOST--After years of unmet expectations on driverless cars, Tesla CEO Elon Musk unveiled the company's Cybercab concept on Thursday night. He introduced a sleek, silver two-seater without a steering wheel or pedals, at Tesla’s "We, Robot" event in Burbank, California.

Musk made a dramatic entrance, arriving on stage in a Cybercab almost an hour after the event's scheduled start. He revealed that Tesla had 21 of these vehicles on site, part of a fleet of 50 autonomous cars at the Warner Bros. studio where the invite-only event took place.

While Musk didn't disclose where the Cybercab would be manufactured, he said it would cost under $30,000 and could be available by 2027. He also mentioned that Tesla aims to have its "unsupervised FSD" (Full Self-Driving) technology operational in Texas and California next year in its Model 3 and Model Y vehicles.

The Cybercab's structure features no controls—no steering wheel or pedals—while its exterior draws inspiration from the futuristic Cybertruck, with its butterfly-style doors and compact cabin seating just two passengers.

Musk had previously debated with his team whether to develop a vehicle that met current regulatory standards or push the limits of fully autonomous driving without traditional controls. Ultimately, Musk decided to go all-in, opting for no side mirrors, pedals, or steering wheel. "I made the call. I'll take responsibility," he said.

Like Tesla’s other models, the Cybercab relies entirely on visual sensors. It will also feature wireless charging, eliminating the need for plug-in chargers. Musk emphasized the vehicle's low cost, predicting it would be "under $30,000." In comparison, the autonomous vehicles made by Waymo, a subsidiary of Alphabet, cost over $100,000 to produce, with $40,000 spent on sensors alone, according to estimates from ARK Invest, led by Cathie Wood.

Currently, FSD is a premium driver assistance system that still requires human oversight. Tesla added the term "supervised" to the product earlier this year, emphasizing the need for a driver to be ready to intervene at any moment.

“It’s going to be a glorious future,” Musk said, expressing optimism about Tesla's autonomous ambitions.

In addition to the Cybercab, Musk announced plans for an electric, autonomous Robovan capable of carrying up to 20 people or transporting goods. He highlighted its potential for high-density transportation, such as shuttling a sports team, and noted that both the Cybercab and Robovan would use inductive charging, without the need for plug-in recharging.

Musk has spent years promoting Tesla’s advancements in autonomous vehicles, repeatedly assuring that they would soon reach the market. Throughout this time, he has painted an ambitious vision for shareholders, though often missing the deadlines.

In 2015, he predicted Tesla would achieve full autonomy within three years, but that goal was missed. In 2016, he said a Tesla car would complete a coast-to-coast drive without human intervention by the end of 2017, a promise that also went unfulfilled. By 2019, Musk was telling investors that Tesla would have one million robotaxis on the road by 2020, generating income for their owners, but that vision has yet to materialize.

As recently as April 2024, Musk reassured investors that autonomy remains central to Tesla's future. "If someone doesn’t believe Tesla’s going to solve autonomy, they shouldn’t invest in the company," he said during an earnings call.

Thursday’s event, which Musk had called as a “product launch,” offered attendees the chance to test ride the autonomous vehicles in the controlled setting of the movie studio lot.

Toward the end of his 23-minute presentation, Musk shifted focus to Tesla’s humanoid robot, Optimus. To prove it was more than just a demo, he announced that Optimus robots would be mingling with the crowd and serving drinks at the event.

"The Optimus robots will walk among you," Musk quipped, urging attendees to "be nice" to them. The event concluded with a group of Optimus robots dancing to music, followed by Musk's declaration: "Let’s party."

This was Tesla’s first product launch since the debut of the Cybertruck in 2019, which finally began shipping in late 2023 after several delays and has since faced five recalls in the U.S.

Releasing a prototype is one thing, but commercialization is another. Since Musk introduced the concept of autonomous taxis in 2019, competitors have made significant progress.

Waymo already operates commercial autonomous taxi services in multiple U.S. cities, providing over 100,000 paid rides each week as of August. Amazon's Zoox is also set to launch autonomous ride-hailing services in Las Vegas, while GM’s Cruise is preparing to resume operations after a temporary halt.

In China, companies like WeRide, Pony.ai, and Baidu are also running autonomous taxi services. Tesla faces the same hurdles as these competitors—regulatory issues, market acceptance, and cost challenges.

One social media user recently shared their experience with Waymo’s robotaxi, noting that a 9-mile (14.4 km) ride cost $120, or about $60 per kilometer, making it quite expensive. Whether Tesla can undercut this pricing remains uncertain.

Musk estimated that the future cost of operating an autonomous taxi could be as low as 20 cents per mile, increasing to 30-40 cents after taxes.

Ahead of Tesla’s event, Kyle Vogt, the founder of Cruise, posted a list of 15 challenges that new Robotaxi companies need to address, including traffic congestion, emergency vehicle detection, AI coverage, and legal regulations.

Musk’s commitment to the Robotaxi project can be explained by several factors. First, the market potential is enormous. ARK Invest estimates that by 2030, autonomous taxi platforms could generate net revenues of up to $4 trillion, as self-driving technology lowers costs and expands the market.

Second, Tesla’s value is often seen as more aligned with tech stocks than traditional automakers. Tesla's market cap is over $700 billion, nearly three times the combined value of Ford and Toyota, despite producing fewer vehicles annually. The key differentiator is Tesla’s autonomous driving technology, which makes solving the self-driving challenge critical to Tesla’s valuation.

Third, successful integration of FSD with Robotaxi could turn Tesla into a direct competitor of companies like Uber, Lyft, and even Amazon. As Musk envisions, Tesla could transform into a "Transportation as a Service" (TaaS) company, unlocking new streams of revenue.

Finally, Tesla needs something to reverse its sliding sales. Global sales dropped 4.8% year-over-year in the second quarter of 2024, with a 10% decline in the U.S. market, according to Cox Automotive. Introducing a groundbreaking new product like the Robotaxi could help regain investor confidence and boost sales.

At the event, Musk also introduced the Robovan, an electric passenger transport vehicle with sliding glass doors and inward-facing seats that can carry up to 20 people. The vehicle could also be used for cargo transport, addressing "high-density issues," Musk said, potentially lowering travel costs to as little as 5 to 10 cents per mile.

In addition, Tesla showcased its humanoid robot, Optimus, which was demonstrated in a video performing daily tasks like retrieving packages. Mass production of Optimus is expected to cost between $20,000 and $30,000.

For Musk, Tesla’s future hinges not just on electric vehicles but also on artificial intelligence and robotics. As expectations around Tesla’s event were sky-high, the relatively short and low-density presentation left many wondering whether Musk can truly deliver on his vision to transform Tesla once again.