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CNN
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Elon Musk and Tesla promised a groundbreaking moment in the company’s history on Thursday evening. It remains to be seen whether they will actually deliver.

For the past decade, the electric vehicle maker’s CEO has promised that true self-driving cars from Tesla are just around the corner. The latest promises will come when Tesla hosts an event on the Warner Bros. lot. Studios in California to unveil its plans for self-driving ‘robotaxis’.

“I think it’s one of the most important events Tesla has ever done,” said Dan Ives, an analyst at Wedbush Securities and a Tesla bull. “I think in five to 10 years it will be seen as the iPhone launch moment for Apple.”

Tesla’s robotaxis would provide rides for passengers without a driver in the car. The fully self-driving vehicles would compete with ride-hailing services such as Uber and Lyft, and Tesla would also test programs with self-driving vehicles from Google’s Waymo and General Motors’ Cruise units.

Part of Thursday’s program could include the introduction of a model that Tesla would build specifically for its robotaxi fleet, a “Cybercab” as Musk has called it.

But details are also expected for the company’s ride-hailing service, which will use both Tesla vehicles and cars owned by Tesla customers who might want to rent their cars for rides when they’re not in use, a sort of Airbnb for their vehicles. Tesla would take a cut of the revenue, while the rest of the money would go to the vehicle owner.

But Tesla has promised that such a program has been close for the past five years. And even if the technology is as advanced as Musk likes to claim, it could be difficult to get regulatory approval. Accidents involving driverless vehicles can cause regulators to halt operations even after they have been approved. It is a risk that services that use human drivers do not face.

GM’s Cruise unit’s licenses to operate self-driving vehicles in California have been suspended by the state Department of Motor Vehicles following an accident in which a pedestrian who had already been struck by a driver-driven car was dragged 20 feet under a cruise vehicle, resulting in serious injuries.

Musk and his supporters insist this will change the fundamental economics of how people get from point A to point B, which in turn will propel Tesla’s stock to a valuation that will rival the market value of any current company in the wouldn’t make it fall. Musk’s promises about autonomous cars have boosted Tesla’s stock for years.

They predict that Tesla could not only make more money selling rides than actually selling cars, but would also increase demand from buyers who recoup their purchase price by renting out their cars for rides.

Tesla and Musk have made promises many times before about the possibilities of autonomous vehicles and when true self-driving would be available. So far, Tesla has not delivered on these promises. And, In addition to the issue of technology, there are also significant regulatory hurdles to overcome.

Tesla has long offered what it calls Full Self-Driving, or FSD, as an option on its cars, which currently costs $8,000. But despite the name, Tesla says drivers should remain in the driver’s seat, ready to take control of the vehicle, even in FSD mode.

In a call with investors in July, Musk said he expected to potentially have “unsupervised (driving)” by the end of this year, adding: “I’d be shocked if we can’t do it next year.” ” But he also admitted: “My predictions on this have clearly been too optimistic in the past.”

If you listen to Musk’s past statements, Tesla is already about a year away from true full self-driving.

‘I’m the boy who shouted FSD. But I think we will be better than humans by the end of this year,” he said on a call with investors in July 2023, before adding: “I have been wrong in the past. Maybe I’m wrong this time.”

While Tesla and Musk have insisted that FSD has achieved its goal of being safer than human drivers, outsiders who have tested the service have found that the vehicles are prone to crashes if drivers don’t regularly take control. An independent testing service, AMCI Testing, found that on average, drivers had to take control every 13 miles driven.

‘Every hour you have three accidents. That is thousands of times worse than competing technology,” said Gordon Johnson, an analyst who has been a fierce critic of Tesla and Musk for years. He predicts that Thursday’s Robotaxi rollout will be “a huge disappointment for investors.”

Even some who are optimistic about Tesla’s ability to deliver on its promises think the service will happen in three to five years at best.

“We look at a decline at 3% of the kilometers driven. While 97% of the road sounds close to that, it’s not even close,” said Gene Munster, managing partner at Deepwater Asset Management, about the number of times a human driver has to take control. “It must be well above 99%. And to go from 95 or 97% to 99% is very difficult. And then there is the question of how many 9’s the supervisors want to see. Is it 99.9%, 99.999%?”

“I think it will take two years to get the technology right,” Munster said. “And another two to three years to get the necessary regulatory approval.”

While Munster is optimistic about Tesla’s future success, he suspects the event will leave investors unimpressed.

“They’ve been talking about it for years,” he says. “The biggest question is about timing. If it lasts longer than three months, investors will take it with a grain of salt.”

Even a bull like Ives said it’s crucial that Musk breaks the skepticism out there, given his past promises.

“This is a fork in the road for Musk and Tesla,” he said. “Either you walk away from the event as a breathtaking moment, or you walk away with a shrug.”