For years, Elon Musk has touted Tesla’s (TSLA) full self-driving (FSD) technology, promising that his company will blow past its competitors in the driverless race.
In 2015, he promised that Tesla would deliver self-driving cars with “full autonomy” by 2017. It’s been almost a decade since that promise, and the company has not rolled out any fully autonomous vehicles.
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However, Tesla’s autopilot technology has come under intense scrutiny after being linked to crashes and on-road incidents that have led to fatalities and lawsuits.
Meanwhile, Tesla competitor Waymo has already placed robotaxis on public roads and partnered with Uber (UBER) .
Earlier this year, Tesla provided an update on its goal of unveiling a fleet of its own robotaxis. But the company’s plans for conquering the self-driving car market don’t inspire confidence in its technology, as they include a surprising addition.
Driverless Teslas are coming… with a catch
If you’re hoping to take a ride in a driverless Tesla in 2025, you might still get your wish.
Deutsche Bank recently published a note to investors after meeting with Travis Axelrod, Tesla’s Head of Investor Relations, summarizing the key takeaways for investors. Tesla still plans on launching paid robotaxi rides in California and Texas in the coming year, "using existing vehicles (3/Y), generating paid rides."
However, these vehicles won’t be fully autonomous, as a human operator will be standing by remotely.
“Tesla believes it would be reasonable to assume some type of teleoperator would be needed at least initially for safety/redundancy purposes,” the report states.
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The report also notes that "Management intends to start off entirely with the company-owned fleet and eventually dynamically adjust supply based on customer demand traffic patterns."
The fact that Tesla feels this measure is necessary raises some key questions.
Can a vehicle be considered “fully autonomous” if it is being piloted in part by a human teleoperator? And why do Tesla vehicles require this when Musk has repeatedly claimed that Tesla’s vehicles will be able to operate entirely on their own with no human intervention?
According to Eran Ofir, the simple answer to the first question is no.
Ofir is the CEO of Imagry, an autonomous driving software producer. He spoke to TheStreet about Tesla's recent announcement, stating, "Teleoperator-based drive is not considered autonomous."
From Ofir's perspective, "It only reveals Tesla’s weakness in admitting that its existing technology is not capable of handling L4."
This means that Tesla is not ahead of the other companies producing robotaxis. In fact, it may be behind. Deutsche notes that "For pure play robotaxi efforts like Waymo and Cruise, Tesla believes they’re essentially using more sensors (e.g., lidar) to compensate for deficiencies in the rules-based software (almost as a buffer)."
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Despite these claims, it's difficult to ignore that Waymo is demonstrating significant improvements when advancing its autonomous driving technology.
A detailed study published by the company in November 2024 revealed that Waymo’s Automated Driving System (ADS), operating without human intervention, displayed “statistically significant reductions in police-reported and injury reported crash rates indicate a promising positive safety impact of ADS.”
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Is Tesla falling behind in the driverless race?
This data indicates that Waymo is quickly advancing towards a future where its vehicles may be able to do what Musk promised Tesla’s would nearly a decade ago; operate without any type of human intervention.
The fact that Tesla plans on using teleoperators for its robotaxi rollout suggests that it is still behind in the driverless race, regardless of what Musk may claim. Ofir provided context on this, stating:
"Tesla is clearly the de facto market standard when it comes to L3 (and their FSD vehicles prove it every day, with hundreds of thousands of paying customers for it). However, on L4 (driverless), it seems that they are not yet ready for the challenge."
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Andrew Franks, Co-Founder of Reclaim247, also sees Tesla's plans for achieving full autonomy as aggressive. He predicts that as long as Tesla's software dependability and regulatory approvals lag behind, "Human teleoperators will be implemented as a gap strategy until regulations and capability catch up with one another."
On the other hand, Franks sees Waymo as conservative and focused in its approach to vehicle safety, which is in contrast to what Tesla has displayed. However, he notes that regulatory approval still poses a challenge for both companies.
"The regulatory environment in which self-driving cars operate remains multifaceted and still developing. Hence, the two companies need to have flexible approaches," he states. "A stark contrast can be noted as Tesla’s self-imposed competitiveness demands a ruling ambition whereas Waymo focuses on steady progress."
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