Latest news with #LiamDenning
Mint
21-07-2025
- Automotive
- Mint
Robotaxi battle royale: Uber's latest move should worry Tesla
Next Story Liam Denning Elon Musk's EV maker may get left in the dust by rivals in the emerging market for driverless taxis if it doesn't get its act together. How this market shapes up is unknown, but Tesla can't take the leadership for granted that's priced into its stock. Tesla's leadership of the US driverless taxi market is far from assured. Gift this article Conventional wisdom has it that the rise of robotaxis is bad for Uber and oh-so-good for Tesla. But conventional wisdom is the antithesis of disruption. Along comes a deal to hammer home the point: Uber's autonomous vehicle partnership with Lucid and Nuro. Tesla should watch out. Conventional wisdom has it that the rise of robotaxis is bad for Uber and oh-so-good for Tesla. But conventional wisdom is the antithesis of disruption. Along comes a deal to hammer home the point: Uber's autonomous vehicle partnership with Lucid and Nuro. Tesla should watch out. The three companies are teaming up to build a fleet of at least 20,000 robotaxis, using Lucid's Gravity electric SUV fitted with Nuro's autonomous vehicle (AV) system, and owned and operated by Uber or third-party partners. They plan to deploy the first ones next year in an unnamed major US city. As part of the deal, Uber will invest in both companies. For Lucid, the funding is to refit its assembly line to incorporate Nuro's technology. But along with the sales pipeline, it has already refit Lucid's distressed stock: Having fallen by nearly 90% over the past three years, it jumped by more than a third on the news as an army of short bets got squeezed. Also Read: Tesla's robotaxis are here: Everything you need to know In theory, robotaxis are bad for Uber's ridesharing business, letting the likes of Waymo, Alphabet's AV unit, Tesla and a few others eat into its business. In December, Uber's stock suffered its single biggest one-day drop in more than two years on news of Waymo's expansion to Miami. The reality, however, is that AVs, currently less than 1% of the rideshare market, aren't suddenly going to displace human drivers. Rather, we'll likely see a hybrid model develop. Like airlines, making AVs profitable relies largely on higher utilization: More butts in seats going places. But we humans travel erratically, so building enough robotaxis to meet peak demand would inevitably mean a lot of empty ones for long stretches of the day, a downside known as 'deadheading'. In addition, AVs can struggle with some of the most profitable but complex routes such as picking up and dropping off at the automotive melee known as the airport line. A better model, at least for the foreseeable future, would involve a baseload of AVs covering a steady diet of rides supplemented by human drivers serving the more lucrative demand surges as well as routes that befuddle robots. Also Read: Tesla's robotaxis are here: Everything you need to know This takes us to a wider point raised by Uber's deal: No one yet knows what success in the autonomy market will look like. In this case, Uber is capitalizing on its own success—free cash flow doubled last year to $6.9 billion—and the struggles of Lucid to secure a pipeline of high-end electric robotaxis. But that is just one of several bets it is making. In April, it announced an agreement with Volkswagen to deploy the latter's Buzz electric vans for autonomous rides in Los Angeles, targeting commercial operation in 2026. And rather than outright competitors, Uber and Waymo are more like frenemies, with the latter's robotaxis operating exclusively through Uber's app in Atlanta and Austin. The robotaxi business is ripe for such cross-cutting competition and collaboration. Besides the hardware and software mix in the vehicles themselves, there is a surrounding ecosystem—cleaning and maintenance, charging, network management and, often overlooked, remote customer service and tele-operations for when robotaxis or passengers require assistance. Beyond this, there is an opportunity for AV developers to license their technology to legacy firms like Detroit's automakers, which have struggled with in-house efforts at self-driving cars. One company that stands apart from all this is Tesla. Mostly vertical integration served the company well in disrupting the auto market with desirable EVs. The benefits in AVs are, thus far, less clear. Last month's launch of Tesla's long-delayed robotaxi service in a patch of Austin has been disappointing, relative at least to the stratospheric expectations set over the years by CEO Elon Musk and which underpin Tesla's triple-digit earnings multiple. Also Read: Elon Musk floats a new source of funding for xAI: Tesla One of this new market's central debates is whether Tesla's cheaper camera-based general-autonomy model can beat the more expensive, gradualist approach using multiple sensors such as Lidar that characterizes Waymo's rollout. Tesla's limited Austin rollout undercuts its high-buzz narrative, but its resilient stock speaks to the strength of belief in Musk's ability to not merely take the lead, but outright crush the competition. Yet, in launching its service, Tesla has started the clock on having to demonstrate real progress. In some ways, the dream of a robotaxi was more valuable to the company than actual deployment. Meanwhile, competitors are placing multiple bets in multiple markets, knowing that some may pay off while others become footnotes. It will be years before we can judge the success of Uber's latest move. For Tesla's stock, priced for dominance, it's a problem already. ©Bloomberg The author is a Bloomberg Opinion columnist covering energy. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Otago Daily Times
11-07-2025
- Automotive
- Otago Daily Times
Problems compound for Tesla
Tesla hit refresh on its EVs, but it didn't work, writes Liam Denning. Forget Tesla for a moment. Just imagine an anonymous company with the following characteristics. Sales of its main product suddenly stopped growing over a year ago and are down 13% so far this year. Its last big product launch bombed. It reiterated plans for new lower-cost versions of its product as recently as three months ago, and they then didn't materialise. The chief executive dove head-first into divisive political activities that alienated customers and then picked a fight with the US president and his party. Having promised a revolutionary new automated product for a decade, missing repeated deadlines, the company finally launched a limited, somewhat automated pilot that looks years behind the competition. Would you pay 140 times earnings to own a sliver of that? Tesla is in trouble. It just reported another dreadful set of electric vehicle sales numbers, once again missing a much-reduced consensus forecast. Tesla has now reported two sub-400,000 quarters in a row for the first time since 2022. The excuse given for the prior quarter's collapse, a temporary shutdown of production lines to refresh the Model Y, was never that convincing and these second-quarter figures now discredit it utterly. The recent sudden departure of Omead Afshar, longtime deputy to chief executive Elon Musk, plus news that Musk will assume oversight of sales in Europe and the US, signal an acute problem. As it was, Tesla was forecast to rack up a second year of falling EV sales and this latest miss likely means further cuts to 2025 estimates. The wrinkle is that Musk himself represents the largest part of that problem. For example, Tesla's recent robotaxi rollout in Austin, Texas, for all its limitations, would represent a milestone for Tesla had Musk not spent years egregiously overselling it. The Cybertruck, an utter flop that distracted Tesla from designing cheaper EVs for the mass market, is Musk's brainchild. Above all, Musk's political exploits have damaged Tesla's brand in key markets and installed an administration openly hostile to EVs and the subsidies propping up what's left of Tesla's profits. The latest sales figures confirm structural weakness across Tesla's markets. The collapse in the premium segment, which comprises only about 5% of unit sales but perhaps 10-15% of automotive revenue, is particularly striking. It is all the more striking because that line-up expanded from two to three models with the release of the Cybertruck only about a year and a half ago. Rather than boosting the segment, however, the Cybertruck's own sales peaked early, compounding a marked slump in the Models S and X, both launched at least a decade ago. Tesla's premium segment outside the US has shrivelled to almost nothing in recent quarters. While we don't yet have a model breakdown by geography for the second quarter, the low headline number suggests more of the same. The bulk of the business comprises the cheaper Models 3 and Y, with the latter alone accounting for perhaps 70% of EV sales. This core of Tesla's core business is also struggling badly, with the two together registering a 13.5% decline in the second quarter. Moreover, Tesla built about 23,000 more of them than it sold, their fifth quarter of excess production out of the past eight; further signalling a demand problem and adding a working capital headwind to cash flow. Refreshes of both models over the past two years have not addressed a basic truth: As with the S and X, these are old models in a fast-evolving market. Nowhere is that more evident than in China, where few care about Musk's relationship with MAGA, but drivers do want the latest technology at an affordable price. Tesla's sliding sales there result purely from a combination of its ageing line-up being overtaken by a range of competitors offering equal or better vehicles at lower prices. The recent release of Xiaomi's YU7 SUV, a high-tech Model Y killer, epitomises the challenge. Tesla's stock was, characteristically, higher on the back of this unambiguously bad data. The justifications for such exuberance are collapsing, regardless. Tesla is clearly no longer primed for dominance in EVs, losing share in China, Europe and its domestic market, with Morgan Stanley estimating an 8.8% drop in Tesla's US sales in June against a 1.7% increase for battery EVs overall. And this is before the impact of EV tax credits being removed by the Republican majority Musk helped to elect. In terms of that other great hope, automation, Chinese competitors are already offering as standard the kind of advanced driver assistance features that Tesla upsells for thousands of dollars. That leaves the US robotaxi dream — and even there, the Austin pilot isn't so much proof of concept as a demonstration that Tesla has much to prove, relative to Musk's rhetoric at least. Tesla's buoyant share price owes everything to a persistent, and US-centric, perception of technology leadership that cannot be found in the actual numbers. — TCA
Bloomberg
07-07-2025
- Automotive
- Bloomberg
Is Tesla Now a Meme Stock?
Opinion Tesla stock has gone up and down a lot this year. Has it finally become a meme stock? Bloomberg Opinion columnist Liam Denning explains the reasons behind the stock's volatility. (Source: Bloomberg)
Axios
26-06-2025
- Business
- Axios
Climate's out — but chaos is in — as a clean energy driver
Global upheavals — from supply chain woes to wars — may increasingly spur countries to replace some fossil-fuel imports with homegrown electrons, a new report finds. Why it matters: "2024 may well become seen as a beginning of a paradigm shift," the latest Statistical Review of World Energy finds. The energy transition is becoming "increasingly associated with a need to deliver energy security through energy independence to protect countries from the types of shocks and uncertainty that such events bring." The intrigue: It goes through 2024, but the idea is consistent with an emerging — if contrarian — school of thought about the Trump 2.0 era. While President Trump isn't interested in global warming and renewables, his foreign and trade policies could make him an accidental climate hawk, the thinking goes. Bloomberg columnist Liam Denning had a recent piece: "Trump Is Cementing the Green Energy Transition He Loathes." The big picture: "Investment in renewables in particular is increasingly being seen as a cornerstone of energy security, enabling countries to disconnect their energy systems from global fuel markets and geopolitical tensions," the World Energy report says. It cites Russia's war on Ukraine, Mideast tensions, COVID, extreme weather and more. That take is part of the huge annual data review from The Energy Institute, Kearney and KPMG. The report tells a wider story about what the global renewables surge is and isn't achieving. Solar and wind together grew nine times faster than fossil fuels, rising 18% last year. But the whole energy pie is still growing too, including fossil fuels, so global energy-related CO2 emissions ticked up 1% to set another record. As fast as renewables are rising, global energy thirst is still growing even more, notes the annual report that for decades was produced by BP until 2023. Zoom in: Low-carbon energy — renewables, nuclear and more — is avoiding lots of CO2 emissions that would otherwise occur. But it's still an addition — not a transition that's lowering total emissions yet. "This pattern, marked by simultaneous growth in clean and conventional energy, illustrates the structural, economic, and geopolitical barriers to achieving a truly coordinated global energy transition," a summary states. Reality check: Displacement of imported fossil fuels with renewable power is concentrated in select markets and a "largely untapped opportunity" elsewhere. Major energy importers — including Japan and South Korea — have made much less progress, it finds. And overall global demand for coal, oil and gas is still rising. Friction point: Trump's pullback from traditional alliances, trade wars, and use of fossil fuels as trade chips will help push countries toward domestic electricity sources, Denning writes. And don't forget veteran Carlyle analyst Jeff Currie's paper declaring the "New Joule Order." It similarly argues that risk and trade concerns — not climate policy — are driving countries to seek domestic sources instead of global commodities. My thought bubble: A related trend is low-carbon sectors like renewables and hydrogen adapting their domestic messaging to the Trump era. You hear much less about climate and much more about how they can help the U.S. become "energy dominant." For instance, check out the American Clean Power Association's statement on the Senate's version of the budget reconciliation bill. The bottom line: Sure, there's a case for Trump 2.0 — and the wider geopolitical landscape — creating momentum abroad for renewables and nuclear on security grounds.
Bloomberg
23-06-2025
- Automotive
- Bloomberg
Tesla's Robotaxi Seems Oddly Familiar
Opinion Tesla's robotaxi launch in Austin last week accomplished what Waymo did ... 10 years ago. Bloomberg Columnist Liam Denning explains why the big reveal didn't match Musk's big talk. (Source: Bloomberg)
