Robotaxi battle royale: Uber's new deal ought to worry Tesla

Tesla may get left in the dust by rivals if it doesn't show results soon

- Liam Denning

Conventional wisdom has it that the rise of robotaxis is bad for Uber and oh-so-good for Tesla. But conventional wisdom is the antithesis of disruption. Along comes a deal to hammer home the point: Uber's autonomous vehicle partnership with Lucid and Nuro. Tesla should watch out.

The three companies are teaming up to build a fleet of at least 20,000 robotaxis, using Lucid's Gravity electric SUV fitted with Nuro's autonomous vehicle (AV) system, and owned and operated by Uber or third-party partners. They plan to deploy the first ones next year in an unnamed major US city. As part of the deal, Uber will invest in both companies. For Lucid, the funding is to refit its assembly line to incorporate Nuro's technology. But along with the sales pipeline, it has already refit Lucid's distressed stock: Having fallen by nearly 90% over the past three years, it jumped by more than a third on the news as an army of short bets got squeezed.

In theory, robotaxis are bad for Uber's ridesharing business, letting the likes of Waymo, Alphabet's AV unit, Tesla and a few others eat into its business. In December, Uber's stock suffered its single biggest one-day drop in more than two years on news of Waymo's expansion to Miami.