LA Private

Robotaxis face challenges amid regulatory scrutiny

Here’s a significant warning for Elon Musk, Tesla, and investors banking on robotaxis to compensate for shelved Tesla EV variants.

Around six months after General Motors withdrew its Cruise self-driving vehicles from US streets due to a serious accident in San Francisco, GM reintroduced a car on Tuesday – this time with a driver.

GM initiated the return with a small fleet of human-driven vehicles in Phoenix, without specifying when these vehicles could operate autonomously. The redeployed vehicles will not function as robotaxis but will “create maps and gather road information in select cities, starting in Phoenix,” GM stated.

Although Cruise aims to resume driverless operations, no timeline has been provided. There’s also no announcement regarding the expansion of human-driven vehicles to other cities.

Before the accident involving a pedestrian being dragged by a driverless Cruise vehicle, Cruise had plans for an aggressive expansion of robotaxis beyond San Francisco. However, the aftermath of the accident led to extensive regulatory investigations and executive restructuring within Cruise and GM.

In contrast, Tesla recently settled a lawsuit over a fatal accident allegedly caused by its Autopilot technology, which was intended to power the new robotaxis. Tesla’s settlement amount remains undisclosed.

Despite these challenges, investors seem optimistic about the potential of robotaxis, even as Tesla attempts to entice buyers with discounted entry deals for Autopilot, despite weakening demand for EVs.

Tesla’s shares experienced a 2.9% decline following the settlement news but have seen a 1% increase over the past five days. However, it remains uncertain whether robotaxis can compensate for the abandoned Tesla EV variants amidst regulatory scrutiny and consumer reluctance towards Autopilot.