Of the swath of bold predictions and product promises that Tesla (TSLA) CEO Elon Musk is known to have made over the years as the firm’s emblematic leader, the boldest isn’t some futuristic electric car but rather a piece of technology that his company is leveraged off of: Full-Self Driving, or FSD.
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Musk’s spiel about FSD is nearly a decade old. Still, during Tesla’s fourth-quarter earnings call on the evening of January 29, he sent a characteristically blunt message to those who doubted him along the way.
“Very few people understand the value of self-driving and [Tesla’s] ability to monetize the fleet. Some of these things I’ve said for quite a long time, and I know people have said, ‘Well, Elon, the boy who cried like a wolf like several times.’ But I’m telling you, there’s a damn wolf this time, and you can drive it,” Musk told investors and analysts.
“In fact, it could drive you. It’s a self-driving wolf.”
Elon Musk, owner of Tesla and the X (formerly Twitter) platform, attends a symposium on fighting antisemitism titled ‘Never Again : Lip Service or Deep Conversation’ in Krakow, Poland on January 22nd, 2024.
Musk sets a bold deadline for a past-due promise
Despite reporting a net year-over-year sales decline earlier this month and weak earnings results before the earnings call, much of the focus of the call revolved around how the company’s future rested on artificial intelligence, robotaxis, and autonomy rather than competing with established automotive rivals like the Detroit giant General Motors (GM) and Chinese juggernaut BYD (BYDDY) .
Despite his nearly decade-old promises for full, unsupervised self-driving, Musk parroted on January 29 that Tesla will launch what they call “unsupervised full self-driving as a paid service” in June. According to Musk, this will be a pilot program of Tesla’s own cars that will be “unsupervised, no one in the car, full self-driving” and deployed as an autonomous-ride hailing service.
“Teslas will be in the wild with no one in them, in June in Austin,” Musk said during Tesla’s Q4 2024 earnings call. “This is not some far-off mythical situation, it’s five, six months away.”
After the initial Austin stint that Musk and Tesla plan for June, Tesla noted that they plan to expand to other parts of the U.S., including California, by the end of the year. Musk said that the slow roll-out was intentional out of a worry of caution, as he recognized that just one accident could kill its reputation for good.
“We’re looking for a safety level that is significantly above the average human driver,” Musk said. “The standard has to be very high because the moment there is any kind of accident with an autonomous vehicle, that’s immediately worldwide headlines.”
Related: Tesla robotaxis are coming in 2025 with an unexpected addition
Musk described its FSD system as a “generalized AI solution” that doesn’t require “high precision maps of locality” or radar/LiDAR systems to function; a flaw that Morgan Stanley analyst Adam Jonas dug deeper into during question time.
“We even have a radar in the car and we turned it off,” Musk said in response to a question about Musk’s “fool’s errand” LiDAR characterization.
“Obviously, humans drive without shooting lasers out of their eyes. I mean, unless you’re Superman. But like humans drive just with passive visual, humans drive with eyes and a neural net and a brain neural net, sort of biological, which is the digital equivalent of eyes and a brain are cameras and digital neural nets or AI.”
Tesla’s announcement is a departure from what outsiders of the company reported.
Previously, a December 2024 Deutsche Bank analyst note that came out of a meeting with Tesla Investor Relations head Travis Axelrod revealed that paid robotaxi rides won’t be entirely “autonomous,” as human operators will be remotely monitoring the Model 3’s and Y’s.
“Tesla believes it would be reasonable to assume some type of teleoperator would be needed at least initially for safety/redundancy purposes,” the Deutsche analysts stated as Tesla’s reason.
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Elon Musk dodged a key Trump policy question
Since taking the oath of office on January 20, President Trump has been swiftly implementing some of his most notable campaign promises, including one that aims to shake up the U.S. auto industry.
Trump’s obsession with restrictive environmental policies that he grouped and labeled as “Biden’s EV Mandate” has legs. So far, his day one executive orders rescinded an August 2021 executive order that set a non-legally binding “EV target” for the U.S. auto industry and established guidelines to “removing regulatory barriers to motor vehicle access” and to “promote true consumer choice.”
On January 28, newly appointed DOT Secretary Sean Duffy issued a memo that ordered the National Highway Traffic Safety Administration (NHTSA) to reevaluate Biden-era rules designed to make cars more fuel-efficient on his first day, calling such policies “forced” electrification.
Much of the earnings call reflected Musk’s intention to frame Tesla as “an AI and Robotics company” rather than just a company that solely makes EVs; however, around the end of the call, Barclays analyst Dan Levy asked a question that could impact Tesla’s current core.
“I know we’ve heard a lot about President Trump’s plans to reverse the EV mandate. I think there’s a view that, given regulation is a driver of EV uptake, this could slow EV uptake in the U.S.,” Levy pointed out. “So what would be your view on the right policy in the U.S., given your comments in the past of the need to push for sustainable transport?”
“At this point, I think that sustainable transport is inevitable,” Musk responded. “I’m highly confident that all transport will be autonomous, electric, including aircraft, and that simply, it can’t be stopped any more than one could’ve stopped the advent of the [internal] combustion engine, the steam engine.”
“Even if you have been the biggest horse advocate on Earth like of the way of the newfangled car, automobiles, you can’t stop the advent of automobile it’s going to happen. And you can’t stop the advent of electric cars. It’s going to happen.”
Related: Tesla’s mysterious “Model Q” drew harsh words from online skeptics
The curious case of Tesla’s “affordable EV”
Another anticipated Tesla product apart from FSD that has been with backed by Musk’s promise was a more affordable Tesla EV.
On December 9, analysts at Deutsche Bank noted that Tesla will launch a vehicle it dubs the “Model Q;” a more affordable Tesla model, which sent online Tesla sleuths to get even more skeptical.
“The new Tesla model (we refer to as “Model Q”) should launch in 1H25 and will be priced <$30k including subsidies (i.e., $37,499 if US EV tax credit goes away),” Deutsche Bank analyst Edison Yu said in his note.
Although other investor-submitted questions overlooked many of the questions surrounding the mysterious cheaper car, Tesla did address something hinting at it.
“We will be introducing several new products throughout 2025,” Tesla CFO Vaibhav Taneja said during the call. “We are still on track to launch a more affordable model in the first half of 2025 and will continue to expand our lineup from there.”
Additionally, the slide deck mentions that “Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025.”
“These vehicles will utilize aspects of the next generation platform as well as aspects of our current platforms and will be produced on the same manufacturing lines as our current vehicle line-up.”
During Tesla’s Q3 2024 earnings call a few weeks after the “We, Robot” presentation in October 2024, Musk noted that such a vehicle would be responsible for “20% to 30% vehicle growth next year.”
Tesla is feeling the outside pressure from more established automakers and its Chinese rivals. With Tesla reporting a sales dip for the first time in nearly 10 years and Musk’s extracurricular activities giving competitors increased confidence in winning disgruntled buyers, it finds itself in a position where it can make no errors.
Tesla Inc. is traded on the NASDAQ as TSLA.
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