Tesla CEO Elon Musk is ready to plunge into robotaxis

Tesla is dominating the electric vehicle industry by going against the grain of legacy automakers: developing its own technology, selling directly to consumers and managing supply chain issues that have slowed down would-be rivals.

And now it's turning to robotaxis.

The automaker based in Texas expects to reach volume production of a dedicated robotaxi model — built without a steering wheel or pedals — by 2024, CEO Elon Musk said on the automaker's first-quarter earnings call last week.

The goal of the new vehicle, which would rely on Tesla's still-incomplete Full Self-Driving software, is to reach the lowest transportation cost per mile and even compete with public transportation, Musk said.

Although Tesla has yet to declare its automated driving suite of vehicle sensors and software as "feature complete," the company is expanding the availability of a beta test version of the software to owners who have purchased it. The current price is $12,000.

Tesla said there are now 100,000 beta testers, and it intends to accelerate its rollout of the automated driving technology to all buyers by the end of the year. So far, Tesla has made it available to groups of buyers based on a software-generated safety score.

However, Musk has promised a real- world version of the self-driving suite for years, and he did so again in January. Musk said he would be "shocked" if Full Self-Driving couldn't operate more safely than a human driver by the end of the year.

There is also the not-insignificant hurdle that Tesla robotaxis will still have to obtain state and federal approval to operate. The General Motors-backed robotaxi startup Cruise just recently launched a small fleet in San Francisco, limited to operating at night. The Alphabet Inc. subsidiary Waymo is operating a fleet around Phoenix.

Critics have said that Tesla should not be conducting its software testing with untrained drivers on public roads. They cite videos on social media that show the software's amateurish driving mistakes — even after multiple updates.

Musk has also long hinted at a future vehicle with no driver controls because they would not be needed. And now, he's set a date to merge his passions for vehicle automation and electrification.

"I think that really will be a massive driver of Tesla growth," Musk said of the robotaxi model.

He declined to give more specifics when asked whether the vehicle would go on sale to the public or be used in a company-run transportation service.

"We don't want to jump the gun on an exciting product announcement yet," Musk said, saying there will likely be a product event next year to offer details.

Tesla's projections show that a future robotaxi ride could cost less than a subsidized public bus or subway ticket, Musk said on the earnings call.

The CEO had first mentioned concrete plans to manufacture the robotaxi during the opening event for Tesla's Austin, Texas, factory this month. "There's going to be a dedicated robotaxi that's going to look quite futuristic," he said.

On the call, Musk said the automaker's sales volume should increase by its stated goal of 50 percent a year into the foreseeable future. Sales growth could hit 60 percent this year, reaching about 1.5 million vehicles globally, despite a temporary shutdown in China due to a coronavirus outbreak in recent weeks.

"We are already back up and running with the Shanghai factory," said Musk, who described the first quarter as very difficult overall because of semiconductor shortages and rising costs.

Some parts suppliers have increased prices by 20 to 30 percent this year compared with last year, said Musk, who expects inflation to remain high through the rest of 2022.

He justified Tesla's repeated price increases for its vehicles, saying the lag between ordering a Tesla and receiving it is up to a year and therefore must reflect future costs.

Tesla said net income and revenue surged after it delivered record vehicles at higher prices. Its global deliveries rose 68 percent in the first quarter from a year earlier to 310,048, the company said.

The Automotive News Research & Data Center estimates Tesla delivered 110,000 cars and crossovers in the U.S. in the first quarter, up 42 percent from a year earlier.

Tesla posted first-quarter net income of $3.32 billion, compared with a profit of $438 million in the year-earlier period, according to Reuters. Revenue rose to $18.76 billion from $10.39 billion a year earlier.

Earnings per share and revenue exceeded Wall Street expectations. Tesla reported earnings per share of $2.86, while analysts expected $2.26. Revenue exceeded Wall Street forecasts by about $1 billion. Tesla's stock rose by about 5 percent following its earnings report.

Tesla has been an outlier since the start of the pandemic, posting record deliveries and earnings for several quarters as rivals wrestled with global supply chain snarls and production halts.

Reuters contributed to this report.