Yahoo

No steering wheel, no problem: Can Tesla speed by Cybercab probe?

Trade Tesla on Coinbase

Federal investigators have opened an investigation into whether Tesla's ( TSLA ) new Cybercabs comply with federal safety standards, just as the company begins testing its service in Austin, Texas.

Market Domination host Josh Lipton is joined by Tom Narayan, RBC Capital Markets lead equity analyst for global autos, to discuss if the investigation jeopardizes the rollout and how Tesla is also trying to avoid an "Apple Maps moment."

00:00 Speaker A

But and speaking of regulators, let let's talk about that because we have this new we have a wrinkle here. I mean federal regulators opened this investigation Tom, how Tesla certified a vehicle with no steering wheel or pedals. I mean, is that a risk to the roll out?

00:12 Tom

It could be, but I mean, this this topic has been talked about for years. And and we've heard policy makers right now, the the the the, you know, federal government is more amenable towards uh uh not having a pedal and steering wheel. And the reality is, look at it this way.

00:30 Tom

The government's states are already allowed for a car to drive itself without a driver. Mhm. I think that's the bigger roadblock, not the fact that it doesn't have pedals or a steering wheel. Do you know what I'm saying? So it feels like, yes, they're looking at it. Yes, it could be a risk, but this roadblock is a little easier to overcome than simply, you know, can there not be a driver at all?

00:50 Speaker A

45 cyber cabs registered in Texas it sounds like. and they're to your point, there was a lot of focus on that. It sounds like when I read your note, you were arguing to your clients, listen, don't don't get so hung up on that number. Focus on the technology and you believe that's what's important and the technology can scale.

1:04 Tom

That's right. If if you listen to the last earnings call, uh the CFO made made it very clear like, look, we're doing this slowly. We don't want to just rush out and have a an Apple Maps moment, right? We all remember what happened to Apple Maps.

1:14 Speaker A

Explain that cuz I like that part of your note. You make this Apple Maps comparison. Tell what do you mean by that, Tom?

1:18 Tom

Sure, if you all remember when Apple Maps came out, I think it was a rushed product and uh sending people to the wrong places sort of thing. Today Apple Maps, I'm told by my nieces and nephews is actually an amazing product, but because of the maybe the brand damage that was done early on, you know, Google Maps just gobbled up that market. So I think Tesla's looking at this and saying we don't want to have that moment. We want to do this methodically and slowly. And what they want to do is instead of just getting really big, let's say in Austin, and then doing it all over again in Miami and then etc, etc. Let's do smaller scale deployments in tons of cities. and then we get approval everywhere. Also, then you get the consumer buy in. If it's ubiquitous and you're in so many cities and the consumers all clamor for this, it's going to be difficult for regulators and states and municipalities to say no, right? And consumers going to be really miffed about it. So it's more about this strategy of gradually doing it without making a mistake.

Mobilize your Website
View Site in Mobile | Classic
Share by: