AVs vs. Airlines
Plus, a busy week at Tesla and Pony's Gen7 costs fall below the Model 3
Welcome to the Ride AI newsletter: The most comprehensive weekly digest of news and intelligence at the intersection of technology and transportation.
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AVs vs. Airlines
Very quietly, we just experienced one of those weeks where decades happen in reshaping American transportation.
On X, Nahuel Hilal chronicled driving 900 miles on FSD from Miami to Nashville. In and of itself, this is not news. Far longer runs have become reasonably commonplace and Tesla fans are rarely shy about publicly waxing poetic about what their cars can do. But while replacing flights with longhaul FSD is today mostly the provenance of ardent Tesla junkies, it won’t stay that way for long.
Think about the utter inanity of flying the NYC-BOS/WAS or even SFO-LAX route. Two $100 Ubers, often an hour away from the airport or destination in major cities, bookend the pleasure of sharing a security line with someone who has never seen a metal detector and a $23 Blue Moon. By the time it’s all said and done, a 45-minute flight is a five hour, $500 trial of Odysseus.
The global airline industry made an estimated $350B in 2024 revenue on short-haul flights, defined here as <1,500km or 930 miles. They are existential to the current industry business model. What becomes of airlines when one-third of their revenue becomes a nonsensical utilitarian decision?
Of course, maybe some of this is already priced in. Tesla’s market cap currently sits at ~12X the all major US airline stocks combined.
All told, it was an eventful week for Tesla.
On April 24, Musk posted a video on X showing the Cybercab rolling off the line at Giga Texas with the caption “Cybercab has started production.” Per the Q1 update letter, Tesla expects volume production of Cybercab and Semi to ramp through the back half of the year, with material revenue from Cybercab unlikely before 2027.
Robotaxi service is on track to expand to Phoenix, Miami, Orlando, Tampa, and Las Vegas in the first half of 2026, again per the Q1 deck. Tesla also received FSD (Supervised) approval in the Netherlands in April, which the company says clears a path to broader EU approvals.
But Tesla’s Q1 2026 earnings call confirmed what HW3 owners have suspected for years: their cars will not run unsupervised FSD. On the April 22 call, Elon Musk said vehicles equipped with Hardware 3 — sold from 2019 to early 2023 — do not have the capability to achieve unsupervised FSD. The chokepoint, per Musk, is memory bandwidth: HW3 has roughly 1/8th the memory bandwidth of HW4, which is the bottleneck for the autoregressive transformer that unsupervised FSD requires.
Tesla is offering HW3 owners who purchased FSD a discounted trade-in to a newer vehicle, plus the option to swap out the computer and cameras for HW4 components. Musk said Tesla plans to set up “microfactories“ in major metros to handle the retrofits at volume, since service centers can’t process them efficiently.
The upshot is we’ll end up with an interesting canary in the coal mine proof point around how much Tesla drivers prioritize FSD. Tesla is often used as a measuring stick for FSD progress but it’s hard to decouple how large a factor it is in most drivers calculus around whether to purchase or upgrade their machine. We’ll report back as trade-in data trickles in.
Domestic News
Zoox has begun the first phase of testing operations at Harry Reid International Airport in Las Vegas. This is the first time the company has operated at an airport, and a precursor to commercial airport service in the city, which last year handled roughly 55 million passengers. Zoox already runs free public rides on the Strip and in central San Francisco. The company says its fleet has now driven nearly two million autonomous miles and carried over 350,000 riders.
They also announced the next city they are rolling into. Hundred thousand dollar (self-driving) cars, errrrbody got ‘em!
PlusAI killed its $1.2 billion SPAC merger with Churchill Capital Corp IX on April 21, four days before the scheduled shareholder vote, citing market conditions. The termination is a notable data point for autonomous trucking's path to public markets: PlusAI isn't a company struggling to find customers. Its SuperDrive system is running live freight on the challenging Temple-to-Laredo corridor with Ryder and International, posting 100% on-time delivery and roughly 92% autonomous route coverage. CEO David Liu said existing investors will back a direct capital raise instead, and pointed to "strong expected revenue in 2026."
Bloomberg’s David Zipper published an interview with UVA historian Peter Norton examining the state of robotaxis in New York after the city’s eight-vehicle Waymo pilot was allowed to expire on March 31. It’s an interesting back and forth and worth a read to get the full scope of rhetorical arguments that Waymo and others are up against in NY. That said, Zipper’s taken some liberties with how he conveys data in the past:
For now, Mayor Zohran Mamdani has signaled no interest in reviving the pilot, and Governor Kathy Hochul withdrew a state-level commercial AV proposal in February. But quietly, there is a pro AV caucus emerging at the state senate and assembly level among New York Democrats, notably State Sen. Jeremy Cooney who organized a delegation of lawmakers to test Waymo in Phoenix.
Worth noting here— while Mamdani is widely assumed to stay hostile to autonomous vehicles due to his close alliance with the transit workers union, he has said next to nothing directly on the record about self driving technology.
China
Geely Auto Group used the opening day of Auto China 2026 in Beijing to debut the EVA Cab, what it calls China’s first natively designed, purpose-built L4 robotaxi. The vehicle was developed jointly with AFARI Technology and CaoCao Mobility, Geely’s Hong Kong-listed ride-hailing subsidiary.
Specs include: a 2,160-line digital lidar with a 600-meter detection range, 1,400 TOPS of compute, and a 196-billion-parameter Step 3.5 large model running Geely’s World Action Model. CaoCao is targeting mass production of a customized version in the first half of 2027, with a fleet target of 100,000 vehicles by 2030.
Pony.ai announced a major cost milestone: the total cost of its 2027 Gen-7 Robotaxi in China — vehicle, autonomous kit, and battery — will fall below 230,000 yuan (~$31,500), undercutting a domestic Tesla Model 3. The company also debuted the world’s first fully vehicle-grade, fully redundant L4 autonomous light truck, developed with CATL for urban logistics.
Separately, on April 22, Pony.ai secured China’s first permit for unmanned cargo operations in autonomous truck platoons, allowing “1+N” unmanned convoys on routes like the Beijing-Tianjin Expressway. Current fleet sits at over 1,400 vehicles with the year-end target of 3,000 across 20 cities globally.
In Other News…
Norway granted its first permit for autonomous bus operations without a safety driver, powered by Applied Autonomy’s xFlow platform in Stavanger’s public transit network.
Glydways closed an oversubscribed $170M Series C co-led by Suzuki, ACS Group, and Khosla Ventures, with pilot autonomous transit operations set for 2026 in the UAE, NYC, and Atlanta.
Humble exited stealth with $24M in seed funding and a cabless, fully autonomous electric Class 8 hauler for dock-to-dock freight.
Tesla’s Robotaxi service hiked rates 41% in San Francisco between December and April per data from aggregator Obi, though it remains the cheapest option in the city. Waymo, Lyft, and Uber raised prices 18%, 12%, and 5% over the same window. Naturally, it’s wayyyy too early to even speculate and what the long-term unit economics here will ultimately settle out at.
That’s it from me… Sophia likely back on the keys next week. If you enjoy this newsletter, share it with your friend, colleague, or boss. Thank you for reading.
-Mike