Musk lowers expectations on robot taxis

Less than two months after touting a plan to put driverless taxis on the road, Tesla CEO Elon Musk is walking back the ambitious timetable.

In April, Musk had announced at an event called Tesla Autonomy Day: “Next year for sure — we’ll have over a million robotaxis on the road.”

Tesla owners could download software and turn their electric cars into moneymaking driverless cars, he said. Their cars would appreciate in value, Musk said, so owners would make more money selling their used car than they’d paid for it new.

But this week, at the company’s annual meeting, Musk hedged that claim, saying, “We will have a million cars capable of self-driving” next year, he said. “We’ll still need regulatory approval.”

So there would be a practice run that could help Tesla figure out how to run an autonomous taxi fleet. “Sort of a supervised robot taxi,” Musk said.

Executives in the driverlesscar industry were highly skeptical of Musk’s original announcement, saying such fleets won’t be practical for years.

Tesla lifted investor hopes late last year with a rapid rise in sales of its latest sedan, the Model 3, and two consecutive profitable quarters. But in the first quarter, sales of all three of its models plummeted, most of all the highmargin luxury Models S and X.

The company, with only four profitable quarters in its 16-year history, posted a net loss of $702 million in the first quarter. Revenue fell to $3.7 billion from $6.3 billion in the fourth quarter of 2018. The company sold 63,000 cars, down from 90,700. Scarce cash got scarcer, dropping to $2.2 billion from $3.69 billion.

Sales rose somewhat from April to May, as Tesla cut prices. Speaking to shareholders, Musk insisted that brighter days lie ahead.

“I want to be clear, there is not a demand problem,” he said, predicting that at least 90,000 cars will be sold in the second quarter, which ends this month, he said, “We have a decent shot at a record quarter on every level. If not, it’s going to be very close.”

Musk also obliquely warned shareholders not to expect nearterm profits. He said he wants to lift Tesla vehicle sales by 60% to 80% this year, after doubling them last year.

Somewhat obscured by the drama over falling car sales is Tesla’s solar energy unit. Revenue for both solar panels and storage batteries is down, as Tesla continues to shrink its solar business. Battery sales haven’t met objectives.

Musk said the company is working on a third version of its solar roof, which is basically solar cells built into attractive roof shingles, rather than conventional bulky solar panels. The solar roof is still not widely available.

Three shareholders complained about media coverage of the company, to the point where “people think you’re on the verge of bankruptcy,” one said. “We’re not,” Musk said. The company responds to media inquiries and attempts to rebut false information, he said. “It’s not like we don’t respond or anything.”