Business
Facing skepticism, Elon Musk unveils prototype for driverless robotaxi
Tesla Chief Executive Elon Musk presented a lofty vision for the future Thursday night, unveiling prototypes of a self-driving taxi and van that he said would revolutionize travel and claiming the electric car company would put fully autonomous vehicles on the road by next year.
At an event on the Warner Bros. Studios lot in Burbank, Musk rolled out examples of what he dubbed the Cybercab. The futuristic, metallic silver vehicles lacked steering wheels, pedals and rearview mirrors. Invited guests took short rides around the studio’s closed roads.
A lot is riding on the Cybercab for Musk, who has been selling unfulfilled promises of autonomous vehicles for years. Although Tesla’s sales of its signature electric cars stumbled early in 2024, the company has an $800-billion market capitalization built largely on the expectation that it will be able to overtake competitors to dominate the burgeoning robotaxi market. Whether Tesla is anywhere close to completing its push to develop the technology needed to do so, however, remains an open question.
On Friday, investors signaled they were skeptical of Musk’s latest claims. At 10:55 a.m Pacific time, shares of Tesla stock were trading at about $219.50, down 8% on the day.
“Investors have clearly been very excited about this for many years even though Tesla hasn’t delivered on it,” said Sam Abuelsamid, a transportation analyst at Guidehouse Insights.
“Tesla’s valuation is much higher relative to their revenues and their profits and that is almost entirely based on the presumption that they will suddenly start generating mountains of new profits,” he said.
Musk also unveiled the Robovan on Thursday night, a self-driving vehicle that can transport goods or up to 20 people. And he topped off his highly produced event with a demonstration of a humanoid robot named Optimus, several of which performed dance moves for the crowd or served drinks.
The event, which the company called “We, Robot,” made clear that Musk has ambitions for the future that go beyond transportation. Speaking to the invite-only crowd and those watching online, he conjured up a world where every family has an Optimus robot capable of doing the grocery shopping, babysitting and watering the plants. The automated labor, he said, would make goods and services less expensive and more accessible.
“It will be an age of abundance, the likes of which almost no one has envisioned,” Musk told the crowd.
While some viewed the event as a proof of concept for Musk’s robotaxi, others were far more skeptical, saying it was all show and no substance.
“Having a prototype vehicle says nothing about whether a company has developed the hardware and software necessary to safely operate that vehicle without a human driver,” said Bryant Walker Smith, an associate professor of law at the University of South Carolina who specializes in emerging transportation technology.
Testing the Cybercab on closed roads is one thing, while being able to produce one that is able to safely navigate real roads is something altogether different, Smith said.
Musk said the Cybercab would be in production no later than 2027 and would be available for purchase for about $30,000. He did not specify whether the Cybercab would rely on Tesla’s so-called Full Self-Driving technology, or FSD, which is already deployed in many Teslas on the road but is not capable of operating without a driver present.
“When we think about transport today, there’s a lot of pain that we think is normal, like having to drive around L.A. in three hours of traffic,” Musk said Thursday. “With autonomy, you get your time back,” he said.
It was a familiar promise from Musk, who has claimed repeatedly since 2014 that Tesla was nearly ready to launch fully autonomous vehicles.
Musk has come under criticism for his claims about the capabilities of FSD, which the company has been selling to customers for thousands of dollars since 2020. The tech is currently dubbed FSD Supervised because it requires an alert, human driver to be behind the wheel during operation.
“The Model S and Model X at this point can drive autonomously with greater safety than a person, right now,” Musk said in 2016, according to a clip that some say has been altered. Tesla’s self-driving feature cannot be used without someone in the driver’s seat and has been linked to several accidents, including fatal crashes.
In May, a Tesla in FSD mode nearly hit a moving train after failing to detect the locomotive. The driver hit the brakes himself and accepted responsibility for the accident, but told NBC News he believes FSD is a defective product.
“Tesla has said that a human driver needs to be more attentive, not less attentive, when using this feature,” Smith said of FSD. “Yet it is the very system that the Tesla CEO has for many years indicated would be imminently capable of automated driving.”
In addition to the robotaxi unveiled Thursday night, Musk spoke of his vision for an ad hoc taxi service, in which owners of Tesla vehicles equipped with FSD would be able to deploy them to pick up paying customers.
Musk said FSD capable of this unsupervised driving would be available to owners of Tesla’s Model 3 and Model Y vehicles in Texas and California by next year.
“I think this is a historical event, the most important that Tesla has done in the last decade,” said Dan Ives, an equity analyst at Wedbush Securities. “Many of the skeptics never thought Tesla was going to get electric vehicles on the road,” he said.
Tesla’s robotaxi business could create $10 billion to $15 billion in annual revenue for the company, Ives projected.
Tesla’s share price has risen nearly 40% over the last six months amid anticipation that the company would soon create a fleet of robotaxis and develop artificial intelligence that would enable fully autonomous driving.
Waymo, the autonomous taxi service owned by Alphabet Inc., already has self-driving cars on the road in Los Angeles and San Francisco. In both cities, Waymo vehicles are completing trips for real customers without a driver present.
Even without drivers, autonomous taxis have expenses, such as charging, cleaning and insurance, which eat into profits.
“No one has really yet figured out a business model for robotaxis,” Abuelsamid said.
Waymo cars use laser-based sensors known as Lidar to perceive the surrounding environment and make autonomous driving possible. Musk has dismissed Lidar as unnecessary and too expensive, but has so far been unable to achieve autonomous driving with alternate technology that relies instead on cameras to take in a vehicle’s surroundings.
“Elon Musk has been quite clear that he doesn’t believe that radar and Lidar are needed and that they can do it with cameras alone,” Abuelsamid said. “So far to date, no one has actually demonstrated that that is a sufficiently safe and viable solution.”
Despite optimistic investors and rising share prices in recent months, Tesla’s sales have slumped, with the company on track to record its first annual vehicle sales decline. The company delivered 462,890 vehicles in the third quarter, missing some analysts’ estimates but marking the first quarterly increase in sales this year. Tesla also slashed roughly 10% of its global workforce in April.
Increased competition in the electric vehicle space has squeezed Tesla’s sales even as the company attempts to appeal to more customers with price cuts and offers of free charging. Startup electric vehicle makers such as Rivian are offering customers other products, while traditional auto manufacturers such as Hyundai and Ford have also released lines of electric options.
Although consumers have options, concerns over driving range and charging time have contributed to faltering sales of electric vehicles in California. Electric vehicle sales are down in the state after years of growth, a trend that has hit Tesla particularly hard.
Musk has set expectations high for his company, and with the Cybercab he is trying to shed a reputation that he makes empty promises. Abuelsamid is doubtful that Tesla will actually deliver on the technology showcased Thursday night in the near future, he said.
“It’s Tesla, it’s Elon Musk, it’s obviously going to be a hype fest,” he said.
Nike is cutting about 1,400 jobs in its operations division, mostly from its technology department, the company said Thursday.
In a note to employees, Venkatesh Alagirisamy, the chief operating officer of Nike, said that management was nearly done reorganizing the business for its turnaround plan, and that the goal was to operate with “more speed, simplicity and precision.”
“This is not a new direction,” Mr. Alagirisamy told employees. “It is the next phase of the work already underway.”
Nike, the world’s largest sportswear company, is trying to recover after missteps led to a prolonged sales slump, in which the brand leaned into lifestyle products and away from performance shoes and apparel. Elliott Hill, the chief executive, has worked to realign the company around sports and speed up product development to create more breakthrough innovations.
In March, Nike told investors that it expected sales to fall this year, with growth in North America offset by poor performance in Asia, where the brand is struggling to rejuvenate sales in China. Executives said at the time that more volatility brought on by the war in the Middle East and rising oil prices might continue to affect its business.
The reorganization has involved cuts across many parts of the organization, including at its headquarters in Beaverton, Ore. Nike slashed some corporate staff last year and eliminated nearly 800 jobs at distribution centers in January.
“You never want to have to go through any sort of layoffs, but to re-center the company, we’re doing some of that,” Mr. Hill said in an interview earlier this year.
Mr. Alagirisamy told employees that Nike was reshaping its technology team and centering employees at its headquarters and a tech center in Bengaluru, India. The layoffs will affect workers across North America, Europe and Asia.
The cuts will also affect staffing in Nike’s factories for Air, the company’s proprietary cushioning system. Employees who work on the supply chain for raw materials will also experience changes as staff is integrated into footwear and apparel teams.
Nike’s Converse brand, which has struggled for years to revive sales, will move some of its engineering resources closer to the factories they support, the company said.
Mr. Alagirisamy said the moves were necessary to optimize Nike’s supply chain, deploy technology faster and bolster relationships with suppliers.
A bill that would have required insurers to offer coverage to homeowners who take steps to reduce wildfire risk on their property died in the Legislature.
The Senate Insurance Committee on Monday voted down the measure, SB 1076, one of the most ambitious bills spurred by the devastating January 2025 wildfires.
The vote came despite fire victims and others rallying at the state Capitol in support of the measure, authored by state Sen. Sasha Renée Pérez (D-Pasadena), whose district includes the Eaton fire zone.
The Insurance Coverage for Fire-Safe Homes Act originally would have required insurers to offer and renew coverage for any home that meets wildfire-safety standards adopted by the insurance commissioner starting Jan. 1, 2028.
It also threatened insurers with a five-year ban from the sale of home or auto insurance if they did not comply, though it allowed for exceptions.
However, faced with strong opposition from the insurance industry, Pérez had agreed to amend the bill so it would have established community-wide pilot projects across the state to better understand the most effective way to limit property and insurance losses from wildfires.
Insurers would have had to offer four years of coverage to homeowners in successful pilot projects.
Denni Ritter, a vice president of the American Property Casualty Insurance Assn., told the committee that her trade group opposed the bill.
“While we appreciate the intent behind those conversations, those concepts do not remove our opposition, because they retain the same core flaw — substituting underwriting judgment and solvency safeguards with a statutory mandate to accept risk,” she said.
In voting against the bill Sen. Laura Richardson, (D-San Pedro), said: “Last I heard, in the United States, we don’t require any company to do anything. That’s the difference between capitalism and communism, frankly.”
The remarks against the measure prompted committee Chair Sen. Steve Padilla, (D-Chula Vista), to chastise committee members in opposition.
“I’m a little perturbed, and I’m a little disappointed, because you have someone who is trying to work with industry, who is trying to get facts and data,” he said.
Monday’s vote was the fourth time a bill that would have required insurers to offer coverage to so-called “fire hardened” homes failed in the Legislature since 2020, according to an analysis by insurance committee staff.
Fire hardening includes measures such as cutting back brush, installing fire resistant roofs and closing eaves to resist fire embers.
Pérez’s legislation was thought to have a better chance of passage because it followed the most catastrophic wildfires in U.S. history, which damaged or destroyed more than 18,000 structures and killed 31 people.
The bill was co-sponsored by the Los Angeles advocacy group Consumer Watchdog and Every Fire Survivor’s Network, a community group founded in Altadena after the fires formerly called the Eaton Fire Survivors Network.
But it also had broad support from groups such as the California Apartment Association, the California Nurses Association and California Environmental Voters.
Leading up to the fires, many insurers, citing heightened fire risk, had dropped policyholders in fire-prone neighorhoods. That forced them onto the California FAIR Plan, the state’s insurer of last resort, which offers limited but costly policies.
A Times analysis found that that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls from 2020 to 2024 nearly doubled from 14,272 to 28,440. Mandating coverage has been seen as a way of reducing FAIR Plan enrollment.
“I’m disappointed this bill died in committee. Fire survivors deserved better,” Pérez said in a statement .
Also failing Monday in the committee was SB 982, a bill authored by Sen. Scott Wiener, (D-San Francisco). It would have authorized California’s attorney general to sue fossil fuel companies to recover losses from climate-induced disasters. It was opposed by the oil and gas industry.
Passing the committee were two other Pérez bills. SB 877 requires insurers to provide more transparency in the claims process. SB 878 imposes a penalty on insurers who don’t make claims payments on time.
Another bill, SB 1301, authored by insurance commissioner candidate Sen. Ben Allen, (D-Pacific Palisades), also passed. It protects policyholders from unexplained and abrupt policy non-renewals.
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Politicians in Washington and the reporters who cover them have an often adversarial relationship.
But on the last Saturday in April, they gather for an irreverent celebration of press freedom and the First Amendment at the Washington Hilton Hotel: The White House Correspondents’ Association dinner.
Hosted by the association, an organization that helps ensure access for media outlets covering the presidency, the dinner attracts Hollywood stars; politicians from both parties; and representatives of more than 100 networks, newspapers, magazines and wire services.
While The Times will have two reporters in the ballroom covering the event, the company no longer buys seats at the party, said Richard W. Stevenson, the Washington bureau chief. The decision goes back almost two decades; the last dinner The Times attended as an organization was in 2007.
“We made a judgment back then that the event had become too celebrity-focused and was undercutting our need to demonstrate to readers that we always seek to maintain a proper distance from the people we cover, many of whom attend as guests,” he said.
It’s a decision, he added, that “we have stuck by through both Republican and Democratic administrations, although we support the work of the White House Correspondents’ Association.”
Susan Wessling, The Times’s Standards editor, said the policy is a product of the organization’s desire to maintain editorial independence.
“We don’t want to leave readers with any questions about our independence and credibility by seeming to be overly friendly with people whose words and actions we need to report on,” she said.
The celebrity mentalist Oz Pearlman is headlining the evening, in lieu of the usual comedy set by the likes of Stephen Colbert and Hasan Minhaj, but all eyes will be on President Trump, who will make his first appearance at the dinner as president.
Mr. Trump has boycotted the event since 2011, when he was the butt of punchlines delivered by President Barack Obama and the talk show host Seth Meyers mocking his hair, his reality TV show and his preoccupation with the “birther” movement.
Last month, though, Mr. Trump, who has a contentious relationship with the media, announced his intention to attend this year’s dinner, where he will speak to a room full of the same reporters he often derides as “enemies of the people.”
Times reporters will be there to document the highs, the lows and the reactions in the room. A reporter for the Styles desk has also been assigned to cover the robust roster of after-parties around Washington.
Some off-duty reporters from The Times will also be present at this late-night circuit, though everyone remains cognizant of their roles, said Patrick Healy, The Times’s assistant managing editor for Standards and Trust.
“If they’re reporting, there’s a notebook or recorder out as usual,” he said. “If they’re not, they’re pros who know they’re always identifiable as Times journalists.”
For most of The Times’s reporters and editors, though, the evening will be experienced from home.
“The rest of us will be able to follow the coverage,” Mr. Stevenson said, “without having to don our tuxes or gowns.”
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