In 2022, Elon Musk and his top exec­u­tives at Tes­la ded­i­cat­ed them­selves com­plete­ly to the devel­op­ment of the Rob­o­t­axi, an ambi­tious vision for a future filled with autonomous vehi­cles. Dur­ing a casu­al brain­storm­ing ses­sion at the house of Omead Afshar in Austin, Musk, along­side Franz von Holzhausen, Drew Bagli­no, Lars Moravy, and Zach Kirk­horn, con­cep­tu­al­ized the Rob­o­t­axi as a com­pact, afford­able, and some­what slow­er alter­na­tive to the Mod­el 3. Musk’s goal was to pro­duce such vehi­cles in mas­sive vol­umes to meet an annu­al tar­get of twen­ty mil­lion units.

A key chal­lenge they faced was the design of a vehi­cle devoid of tra­di­tion­al con­trol fea­tures like steer­ing wheels and ped­als while still com­ply­ing with exist­ing safe­ty reg­u­la­tions and address­ing prac­ti­cal con­cerns, such as door oper­a­tion and access to restrict­ed areas. Through­out the sum­mer, Musk was heav­i­ly involved in every minute detail, aim­ing for a design that epit­o­mized full auton­o­my.

How­ev­er, con­cerns arose regard­ing the time­frame for achiev­ing com­plete self-dri­ving tech­nol­o­gy (Full Self-Dri­ving or FSD) readi­ness. Dur­ing a tense meet­ing on August 18, dis­cus­sions revolved around whether to include a steer­ing wheel and ped­als to adhere to reg­u­la­to­ry stan­dards or pro­ceed with a ful­ly autonomous design. Musk, after a peri­od of debate, deci­sive­ly opt­ed for the lat­ter, empha­siz­ing his com­mit­ment to full auton­o­my with­out com­pro­mise.

Despite Musk’s firm stance on a ful­ly autonomous Rob­o­t­axi with no con­ven­tion­al con­trols, he demon­strat­ed flex­i­bil­i­ty lat­er that sum­mer. Influ­enced by von Holzhausen and Moravy, he recon­sid­ered incor­po­rat­ing a steer­ing wheel and ped­als into the design. This shift was moti­vat­ed by the real­iza­tion that reg­u­la­to­ry approval for ful­ly autonomous vehi­cles might be immi­nent in the U.S. but could take much longer on a glob­al scale.

Par­al­lel to the focus on the Rob­o­t­axi, there was an ongo­ing dis­creet project led by von Holzhausen—the devel­op­ment of an afford­able, mass-mar­ket Tes­la car priced at around $25,000. Ini­tial­ly paused by Musk in favor of advanc­ing the Rob­o­t­axi, the con­cept of this small­er, inex­pen­sive vehi­cle was revived amidst dis­cus­sions, acknowl­edg­ing its poten­tial to sup­port Tes­la’s ambi­tious growth goals and cater to a sig­nif­i­cant mar­ket seg­ment. This piv­ot high­light­ed both the assertive vision for Tes­la’s autonomous future and the prag­mat­ic approach towards mar­ket expan­sion and prod­uct diver­si­ty.