Tesla says it will start selling Cybercabs by end of year

Tesla stated on Wednesday that it intends to begin selling its autonomous Cybercab vehicles to customers by the end of 2026, despite an ongoing federal investigation into the vehicle’s compliance with safety standards. During the company’s third-quarter earnings call, Lars Moravy, vice president of vehicle engineering, confirmed that while current production units are being allocated exclusively to Tesla’s internal robotaxi fleet, the company plans to transition to direct consumer sales soon. Moravy explained that Tesla will initially release these vehicles in small numbers to gather data on delivery logistics, ownership experiences, and fleet management before scaling up distribution. The Cybercab is a gold-colored, two-seat vehicle designed specifically for ride-hailing services. It lacks a steering wheel, brake pedals, and traditional mirrors, relying instead on automated systems and camera-based perception. Elon Musk, Tesla’s CEO, described the vehicle as primarily a "transport as a service" offering rather than a personal asset. He noted that the vast majority of Cybercabs would likely remain owned by Tesla, distinguishing them from conventional models like the Model 3, Model Y, and the upcoming Roadster, which are intended for private ownership. This announcement follows recent developments in Austin, Texas, where Tesla launched a limited pilot program allowing members of the public to book paid rides in the autonomous vehicles. The rollout occurred shortly after Tesla hosted a promotional event for the car earlier this month. However, the deployment faced immediate regulatory scrutiny. Hours after the vehicles began operating on public streets, the National Highway Traffic Safety Administration (NHTSA) announced it had opened an investigation. The agency is examining the technical data and processes Tesla used to self-certify the Cybercab under Federal Motor Vehicle Safety Standards (FMVSS). Existing federal regulations mandate manual controls such as brake pedals and specific mirror configurations for passenger vehicles. These rules were established decades ago for human-driven cars and currently do not explicitly accommodate vehicles designed without human intervention. While the Department of Transportation has proposed amendments to remove these requirements for fully autonomous vehicles, those changes have not yet been finalized. Consequently, current standards remain in effect. NHTSA stated it is reviewing the basis of Tesla’s certification and determining which specific standards the company deemed inapplicable. Tesla has until October 30 to respond to the agency’s inquiry. The outcome of this probe could determine whether Tesla, or any other manufacturer, can legally operate vehicles lacking manual controls on public roads. In addition to the Cybercab update, Tesla disclosed that it has begun production of its Optimus humanoid robot at its Fremont, California, factory. The manufacturing space previously dedicated to electric vehicle assembly is now producing the robots. Tesla described the initial output as "production-quality," indicating that the current manufacturing process is suitable for commercial products, although further iteration on hardware and design is planned. Musk characterized this phase as "early production," warning that the ramp-up would be slow and somewhat bumpy due to the novelty of the product. He cited the need to ensure the robots are safe, reliable, and durable enough for long-term use, noting that significant work remains regarding the artificial intelligence required for open-ended tasks. Despite these challenges, Musk projected that Tesla could manufacture 20,000 Optimus units per week by the end of 2027. Financial results for the third quarter reflected the heavy investment in these new technologies. Tesla reported total revenue of $28.04 billion, slightly below the $28.09 billion recorded in the same period last year and down approximately $200 million from the previous quarter. Electric vehicle sales remained flat year-over-year at $20 billion, with deliveries totaling 486,532 vehicles. This figure represented a modest increase of about 6,000 units compared to the prior quarter but was lower than deliveries in the same period of the previous year. Revenue from the solar and energy storage division fell 16 percent year-over-year to $2.8 billion, a decline attributed to tariff-related customer refunds. Conversely, the services segment, which includes subscriptions to the Full Self-Driving software, grew 33 percent to $4.6 billion, generating a record gross profit of $734 million for the quarter. Despite stable revenue, Tesla’s net income dropped sharply. The company reported $787 million in net income, a 43 percent decrease from the $1.37 billion earned in the same period last year. Executives attributed the profit decline to soaring expenses associated with artificial intelligence research, the Optimus robot program, and autonomous driving development. Reduced sales of regulatory credits also contributed to the pressure on profitability. Regarding the broader autonomous driving roadmap, Tesla executives indicated that an unsupervised version of the Full Self-Driving software, designated as Level 4 autonomy, is expected to roll out to customers in the second quarter of next year. Ashok Elluswamy, vice president of AI software, stated that this update would enable privately owned Teslas to join the robotaxi fleet. This timeline represents another delay, as Musk had suggested in April that the unsupervised version might arrive in the fourth quarter of this year. Currently, Tesla owners can subscribe to the supervised version of the software, which automates many driving tasks but requires the driver to remain attentive and ready to intervene. Investors reacted cautiously to the earnings report. Tesla shares declined following the call, partly because Musk offered no new details regarding potential synergies with SpaceX, a topic of significant interest among shareholders. The market response highlighted continued uncertainty surrounding the execution of Tesla’s pivot toward becoming an AI and robotics company, a strategic shift that has defined much of the company’s recent operational focus.