Tesla - The Robotaxi Market - An overinflated Hype?

the entire premise of robotaxi is based on the idea that normal car owners would enroll their privately owned cars into the robotaxi fleet while they don't need it, hence the car paying for itself (kind of) and tesla taking a share of it. if that were ever to happen, it would mean that the more robotaxi (or equivalent) capable cars are there, the less you can actually earn with it. premise one: you drive your car to work from outside the city right into the center where you can't park. No problem, because you'll just have your car do some ride hailing until you're done with work, right? 90% of the people working with you had the same idea. everyone is working, everybody's cars are driving around in circles, trying to figure out when they will get to a free charger to recharge and not run out of juice. they can't park, so they have to go in circles. they might get a hail from or to the airport but can't take it, because they possibly won' make it back in time to pick you up. or they take it and get stuck in traffic, leaving you stranded at work. premise two: you're on vacation, you enlist your car into the fleet. it can't go into the city, because that spot is full with cars of people who work there. where will it go? it needs to be somewhere close to people who need a ride, your home won't be that. the logistics are a big part of this game and they are not part of the service right now. like - will you be guaranteed to get rides? if yes, how many?

I stated similar analysis and I fully agree on what you are saying. Even if the robotaxi just with cameras would work, it will be a highly competitive market which will result in shitty margins. The barriers to enter the market are getting lower and even VW is on the path to have something like a product in that regard which tells you many companies will try to be relevant in that field.  All that combined with the in my opinion severe and probably irreparable brand damage Tesla has suffered due to Elon already defines the robotaxi as a non relevant product.  Remains the Optimus robot which has so many question marks I don't even know where to begin with 😅

The pipe dream is that all sold teslas up to today can be used as robotaxis. This will of course never work because when they are done with testing the hardware requirements will be future HW5 which none of current Teslas use.

The thing about ARK investments and forecasts is that they’re based on Tesla going above and beyond on all their predictions. ARK are nothing without Tesla and will always hype them up even when we know it’s all smoke and mirrors.

And you even forget peak demand hours. With the revenue each taxi needs to make it is impossible.

I always assumed that sharing the wealth was a lie and the inflated price is from a fever dream where poor people and middle class people can’t afford cars and have to sign a subscriptjon service with a mega company (Tesla) with a huge supply of vehicles at cost (even heavilg subsidized) and no drivers to pay. Vehicle ownership, fees snd fines- already super regressive- would make car ownership a luxury item But all your points seem accurate. It just doesnt seem that replacing Uber and Yellow cab is a trillion dollar business.

Enroll your car as robotaxi and assume liability for what your car does while out of your control. Sounds like a solid plan.

Who is going to sign up to let randos ride around in their $50,000 car with no human supervision? The whole idea is dumb.

One thing I don’t understand is why Tesla has the valuation it has, even IF you believe they will figure out great robo taxis… Let’s assume they do… Their valuation still makes no sense because it only works is they are the ONLY ones to do it. And there are several companies already ahead of them, with more following. So even if they make them… they will just be one of many, and should be valued like any other car company that’s also going to have them.

I mean, once you can convert it to You buy a car, it can transport you anywhere, then there is a market, the taxi market itself is not worth much.

You forgot one key thing. Robotaxis really only make sense in higher population areas, which tend to lean democrat. As evidenced by his shrinking car sales, democrats will no longer support Musk’s businesses. Add to that; the fact the Musk has recently begun attacking Trump. So even some republicans are upset with Musk. In today’s world, your political affiliations can highly impact your business. I am doubting that robotaxi will be popular out of the gates.

The liability factor would be through the roof. Lol.

We’ll get there with HW99

This is only true for the US, the only „developed“ Country in the world with almost no functioning public Transport. Why would a European or an Asian pay 5 Bucks per day to get to work with a Robotaxi when they get public transport for the whole month for 30 or 50 bucks? Makes no sense for average income workers. And Executives will still have their own personal cars.

If there is excess profit, more will enter. The whole business could easily become like the airlines or rental cars, very capital intensive and low profit.

How does tesla not get sued by all these false claims of their product functionality?

This is the thing that always confused me. If they work as taxis like that and actively earn money, why would they sell them to regular people and not just make cab depots and run it themselves?

Yes, the trillion dollar + valuation is absurd. However broadening it out to all the level 4/5 automation companies, I could see it. It's important to not get trapped in a zero-sum mindset that all robotaxi rides can only come from canabilizing taxi/rideshare trips. To give an example, when Uber arrived, yes it ate into the taxi market quite a bit, but overall the number of total rides of rideshare + taxi service [grew tremendously.](https://imageio.forbes.com/specials-images/imageserve/623de47f7fafd5a054737714/20220325-Taxi-NYC-Forbes/960x0.jpg) (ignore pandemic numbers, it's bounced back since) I'm certain this will happen with robotaxis. Traditional rideshare + taxi usage will be partially cannibalized by Waymo and others, but the overall numbers will increase dramatically. Beyond that we could see new transport and delivery markets opening up. The big problem as you mentioned earlier is the competition. If Tesla were alone, it would be one thing. However with so many big players in the race, and with Tesla failing to secure first-mover advantage, they won't be able to dominate the market like they did with EVs in the early 2010s. So yes, lots of money to be made in this space, but it will be fiercely competitive. This will drive down marketshare and margins.

A for-rent car without a driver would be cheaper. Imagine if your Uber ride cost much less? Would you use it more if it cost less? The only problem is that Elon's insistence on no LIDAR makes his implementation unrealistic and dangerous. Tesla robotaxis are fairy tales

Especially without lidar.

That's a great point.

The entire concept is broken. They cant open a gate, charge themselves, see in the rain… ya know… lots of important stuff that would be necessary for the plan to be viable.

The times most people are active and moving is during the day. If everyone that has a robo-taxi tries to make money at night there will be so much competition that you won’t make any money. No one should buy a car expecting it to make any real money.

Liability has to be with the company using it, in this case Tesla.

💯 this is another tech scam

Maybe if you live in a place where it’s not worth it for them to have their own fleet and then it’s probably not worth it for you either. Either way they will take a cut like Lyft and uber. Scam

won’t happen for privately owned vehicles. upkeep & maintenance is all on you.  Fatal collision? they’ll  blame the dirty camera from your negligence

"The Ark forecast seems to be heavily inflated assuming cost per mile of $0.25" Thats insane. The federal mileage rate is around 70 cents these days.  And that doesn't include any overhead costs to operate a business, clean the vomit, etc. Its all just make believe.

Tesla(Musk) bet the company on Robotaxi. He made the ultimate mistake. 60% of Tesla’s profit came from energy credits and $7500 tax credits. Gone! Get ready for a dramatic stock collapse.

i am not getting in that fucker

IMHO, Musk's spirit animal has always a scamster named Victor Lustig. He sold money printing machines...which begged the exact same question - why sell them when you can keep them to print your own money. [https://en.wikipedia.org/wiki/Victor\_Lustig](https://en.wikipedia.org/wiki/Victor_Lustig) Lustig even staged fake demos of his money printing machine - later Musk channelled Lustig with his faked "Paint it Black" video.

If the camera is too dirty, their system has to flag it and refuse to drive. They are basically renting the car from a private person. Its like trying to blame the rental company for what you've done while renting their car.

Because what Elon says is not what Tesla officially say. Even though he holds the Tesla future shows and claim stuff like cybertruck will have 1000 miles range, ship in 1-2 years and be indestructible starting at 39,999. They always miss the mark. Try to be like Apple keynotes but the difference is that Apple actually ships most products on time for the announced price while Tesla always underdeliver late if at all, and 2x more expensive than promised.

After 3 days the car will be 100% trahsed af. Everyone knows what people do when they are alone and to otherones property.

The fact that this hypothetical market will saturate very quickly also holds true in the short term. In the US, there are approximately one to two million vehicles used for ridesharing. Tesla already has around three million vehicles on the road. So, if the dream came true and all Teslas became robotaxis (a big if), it would already lead to oversaturation and low margins.

>the entire premise of robotaxi is based on the idea that normal car owners would enroll their privately owned cars into the robotaxi fleet while they don't need it, This is the dumbest premise. So I'm going to first off clean my car DAILY because it's a public taxi? I'm going to depreciate my car the miles? Oh it's electric, so it's going to come home uncharged and unready for my use? And then all the points you bring up about competition... If it was profitable Tesla would own the cars, if it's not they sell you the false vision because you're gullible and bought into it with a vehicle and/or equity.

Thats a hell of a loop hole. If I was asked to sit on a jury I would have no trouble attributing statements by the CEO to be statements by the corporation. Tesla needs to publicly deny these statements.

FSD is always deactivated before collision so it's never their fault! 🤷

HW69.420 HURR HURR HURR

But Elon is edgy and loves the letter X!

Going to be hard to argue in a robotaxi when the person in it could just as well be a minor without a drivers license

Never ever underestimate corporate lawyers ability to weasel out from liability.

Uber and lift are only moderately profitable and they don’t pay for any of maintenance, depreciation assets, or upkeep.  In addition there is no way a robotaxi is going to be able to function in over half the world. The roads and lack of traffic laws of India alone will make this impossible. Imagine a robotaxi in Italy on their streets with their drivers. Or in Bangkok with all of the small motor scooters whipping in and out of traffic. Robotaxi is not a functional product for a large portion of the world.

Time for some judges to spank them with the book

true I'm paying €12/year (EU-BE) for a full access to city public transportation, Germany is €50/year for all country including trains

When the huge lawsuits hit and juries award $100 MILLION judgments, this will end driverless cars altogether. .

Robotaxi was never about the taxi part. The primary goal is to license the tech to other manufacturers. Eventually all new cars or at least all luxury cars will have FSD, not for taxi purposes but for personal use. The licensing is where this pays off. Tesla has fallen so far out of this race that they probably will never make a profit on this. Ford just recently cut talks with Tesla about working with their FSD development. The public statement is that Waymo is better technology.  Waymo has a better chance of decreasing their hardware cost that works with their proven software than Tesla has in ever getting FSD with their software and hardware.

The trillion dollar robotaxi market is dependent on Americans giving up their cars and European’s giving up their public transportation. Not likely going to happen.

Except the Robotaxis are not off the shelf and not available to consumers to directly purchase, they are modified Model Ys

Functional countries have good public transportation. The only places that this Robo taxi idea even remotely works with are the US and, well, the US. Here’s a question. How many people would use their car as a Robo taxi long-term? Sure, you could see a lot of people signing up to do this for a little bit, but how many are going to stick around for months or even years? How many times Will they have to clean up after some random stranger in their car before they decide enough enough? How much damage will they put up with to their seats? How much wear and tear are they willing to put on their vehicles? How comfortable are they with letting their personal vehicle be used when they need to use it? I could see a lot of people signing up and trying this once or twice, but the first time you hear about your friend having to clean up after someone crapped in their car, there will be a lot of people leave in the program. Even faster if they have to deal with Tesla insurance, where they won’t be reimbursed for damage caused by riders .

It's not a functional product inside a highly documented and geofenced area inside one of the nicest weather cities in the dystopian hell hole that is Texas

I‘m sure you could have your Model Y retrofitted for a „small“ fee :)

Why are people getting paid to make these dumb predictions? Where did they get to $45 billion in 5 years? At $4.20 per ride, we’re looking at more than 107 million trips per year. We’re halfway through 2025 and They have completed 0 taxi rides without an employee supervising. This is like some high school kid confidently saying they are going to make $45 million per year doing “business” within 5 years. Then, $1.4 trillion 10 years after that? So current revenue of the global taxi market is going to increase 5x in the next 15 years, and Tesla will have 100% of it? So whatever dumbass cooked this up sees no issues with scale. Is there room for an extra 100 million cabs on city streets? Will that congestion reduce the overall number of rides they can complete per year? Will consumer habits remain the same? Clearly all they did was draw an arbitrary line on a graph and say “look, that’s us!”

There is no way they could have generated the capital that they have by going straight to a depot. They had to sell the dream to the masses first. I wouldn't be surprised if in the future there legal team writes a clause into all the leased vehicle contracts that the vehicle can be used by Tesla whenever it feels like it for service duty without your consent (because you already signed the contract).

I detail cars as a hobby and can not imagine the vile mess and smells my car would return with having joined a robotaxi fleet

The current state of rideshare is that corporations pay ZERO dollars for vehicles and all their associated costs (maintenance, taxes, fuel, registration) while paying a very small percentage of the total fare to human drivers. Anyone who thinks that human drivers are the thing taking up the lion’s share of rideshare profits has never actually driven rideshare.

Tesla today doesn't take any responsibility for FSD issues. I think the liability will have to be covered under your car insurance. And since this is a special case, you might have to have Tesla auto insurance to be covered for robotaxi. And since owners pay the premium, its basically split responsibility.

He is an officer of a public company. Basically, his punishment/reward is reflected on the stock price. ... Atleast that's the idea. That said, I think Tesla has been so off on their last two releases (cybertruck and roadster), is because Elon was distracted with other BS. A company as big as Tesla should have no problem working on 3-4 different cars and initiatives.

I think the roadster would have been ready if it wasn’t for Elon. He is constantly barging in and firing staff and reorganizing so that they can’t concentrate on doing what they should be doing. Improve quality and build new cars. Cybertruck was his idea and it turned out like the thing that inspired him, a dumpster.

But then how would Elon fire entire teams while coming down? No way hes stable enough to have teams working on that many projects at once.

Which other CEO make 69 and 420 jokes or has a S3XY car line up? That obviously makes them extra valuable.

Nah it will go up 10% on nad news like it always does. Tesla bagholders are fucking insane.

Absolutely. Complete lack of directive and focus and it trickles down to the organization. Why the fuck are you making humanoid robots when you should be working on delivering products that customers have paid you, 7-8 years ago?

Exactly he could have just started a new company called xrobot or whatever and have them develop robots and not distract Tesla engineers.

That is one of the key assumptions. There are a lot of countries around the world where people in cheap cars are driving for some hundred dollars per month. The Uber rides there are already very cheap. Tesla has not shown to be very good in the low cost market and the FSD technology including first, second and third level support is going to cost as well. Personally have been using Uber a lot of times in Brazil and always have been astonished to how low the prices were.

I mean, if tesla owns the fleet, they can run it 24x7 at scale and be successful. But when you include others cars... things get very complicated.

How is owning the fleet ever going to be cheaper than paying an immigrant pennies on the dollar for him and his 3 cousins to drive their 2014 Prius?

Now the 3 cousins will work in the Tesla service center, cleaning vomit and mud. lol. J/king. I mean, they don't have to deal with labor laws, human, staff etc. Why do any company automate stuff? Reduce human error, reduce head count and get consistency.

I mean you didn’t answer the question, but I will, it’s not cheaper, will never be cheaper. Some rides aren’t even making the federal minimum mileage allowance. Most states drivers aren’t even guaranteed a minimum wage. You’re actually increasing human labor with robotaxis, because the human driver buys, maintains, repairs, registers, cleans, and stores the vehicle. All for FREE. Now you have to pay people to do those things. No matter how efficiently you do them, they still cost you money.

I'm traveling and Uber in Quebec City was pretty cheap. Always driven by immigrant labor.

>> because the human driver buys, maintains, repairs, registers, cleans, and stores the vehicle. All for FREE This is a very good point I didn't think off. It almost counter balances having to build an infrastructure to support this. But, I think this is what will happen. They will franchise out support centers and fleet, where basically one person can now own 10/20 cabs that operate in a vicinity. Hire 2 guys to charge and clean the fleet.

The courts are more than a little excited about throwing out any and all consumer protections.

Premise 3: you allow your car to drive people around at night, while you sleep. The responsible kind of people who are out partying while you are sleeping. You wake up to a car encrusted in vomit, blood, urine, feces, semen and some other bodily fluids you can't identify at first glance or sniff. Also, there's a dead hooker in the frunk. You don't have time to deal with it before work, so the car marinades in those juices all day becoming infused with a permanent reek most charitably described as unbearable. Passengers with a sense of smell somehow start rating your ride at zero stars in spite of 1 star being the lowest on the app.

And now you have to pay FICA and healthcare premiums for those two guys. Costs taxpayers were covering through ACA marketplace subsidies when those guys were working on a gig app. There's no way you can possibly marginalize workers enough to make that cost effective. No amount of vertical integration and scale will make this a highly profitable business. The best Tesla can hope for is it provides a market for their vehicles and is not a huge money loser. The taxi business is well understood.

You're assuming any insurance company would sign up for that risk. The only supplier of commercial self driving insurance will be Tesla, and depending on amount of accidents and claims could go insolvent very, very quickly.

"has to" but "wont be"

> This is the thing that always confused me. If they work as taxis like that and actively earn money, why would they sell them to regular people and not just make cab depots and run it themselves? Because then the buyers bring the capital in. So you don't have to handle the assets and the upkeep, you only rake in the service fee, and margin increases by a lot.

>\* Having a margin of 60% is far from realistic as a) competition from other companies, b) competition from human drivers.  It is not just far from realistic, it is completely ridiculous. There is an old saying "your margin is my opportunity." Telsa might be able to make that amount initially, but if those numbers are even possible--which I highly doubt--somebody else will jump in an do it for less. We saw this with the car business. When Tesla was effectively the only serious EV manufacturer their margins were incredible for a car company. Now they have competition their margins are down to normal car company margins.

I could see 100 million trips a year generating 45 bil in revenue if the cost to provide those trips was 200 billion. At $4.20 a trip, assuming sufficient availability, I'd opt to ditch at least one car. It costs me far more than that in gas, maintenance and amortized wear and tear on the car. Wouldn't need 100 million cabs to provide 100 million rides a year either. That'd be a ride every 3 days assuming 1 million cabs. Where the numbers fall apart is the cost of that revenue. Driver labor is NOT the gating factor.

A company I know very well sells products. The margins are quite good on the products. They faced a revenue drop and tried to operate the products for a customer and found out that they compete practically against everybody and that the margins are extremely tight. Did not make money. Left the business. So producing cars with a healthy margin is possible. Operating the cars for a profit is a whole other story.

You know, many people are already tired of life today so just imagine how many it will be in 15 years. For those people, Robotaxis are a fast and simple solution. Not too many repeat customers, I guess.

“In May 1922, Lustig posed as Robert Duval and visited a bank in Springfield, Missouri”

There's no source for any of this stuff for half the claims around Robotaxi's and that's exactly why the valuation has become so ridiculous. It's not terribly different from what we saw with all the digital and remote work companies post-COVID and it's also worth pointing out that's where Cathy Wood got recognition initially, selling this big vision of a radically different economy and dumping money into high risk plays that ultimately fizzled out. Tesla for its part literally can't even commit to what its theoretical business model would ultimately be despite Musk continuing to claim an imminent public launch within a year. Will Tesla own the vehicles? Will it just run a network and get a revenue cut? How will insurance work? What about all the supporting infrastructure to clean, service and possibly recover or tow vehicles? They're nowhere near putting all this stuff together it's all just promises, projections and numbers on paper because the underlying service they're trying to sell still doesn't work safely enough at a fundamental level to actually perform autonomously. It's all literal fan fiction based on some really ridiculous extrapolations from early pilot projects of interest in Robotaxis in large urban areas where auto ownership is already relatively low considered suburbia. Tesla for its part has literally designed the 'Robotaxi' vehicle completely around ride share data. That's why it's a two seater along the very obvious intent to try to tie projected manufacturing cost to profitability. Tesla is already behind and can't even argue they're going to be first to market or the only participant so the narrative has shifted to this idea that they're going to drastically undercut the competition on pricing instead. That's kind of where it currently stands, with bad enough math and accounting a firm like ARK can produce a ridiculous model premised on idiotic assumptions that spits out a $0.25/mile cost number. Just assume the car and battery will last 500k miles, require next to next to o maintenance, never be damaged in an accident, need more frequent interior cleanings and replacement, etc. Everything looks way better if you amortize it over 10 years and assume the market isn't at all competitive for that entire span and that business is still viable at the same rate of profitability into perpetuity. Also just throw delivery out there as a bigger market despite it having far worse margins and there being no real solution for getting things to the doorstep or into the vehicle to begin with. If this really does simply eat market share from ridesharing services and it becomes as popular as Uber it has something like $80B in potential revenue from the US and you can see from Uber's existing business how much of that gets eaten up just running software, processing payments and handling customer service requests. By far the worst thing for Tesla is going to be when someone does start to scale the roll out of a competing Robotaxi service because then the financials will become public knowledge and all this fantasy about what could be will melt away. Same thing we're seeing with Tesla's auto manufacturing business right now. It was easy in 2022 when their auto shortages from COVID supply chain disruptions and a completely lack of competition in the space to claim operating margins would be north of 25% into perpetuity. But as soon as all the fantastic battery technology failed to material and the next generation manufacturing processes never panned out the dream died. Tesla couldn't even maintain its prior industry leading margins because they were inherently premised on the market not being competitive at the time and an overall lack of supply in the market that was quickly rectified. Right now things work because there's a thin veneer of plausibility to investors and analysts who haven't bothered to ask any hard questions about how things actually look in a competitive market or really dig into what costs and ownership trends would look like at different cost points, let alone Tesla's actual ability to deliver anything resembling a working product. It's real dollars chasing a dream premised on napkin math and a complete lack of proper discounting for the substantial risk that Tesla completely failed to deliver a viable product at all.

Definitely. I would never rent my car out as a Taxi. A Friend of mine operates some Ubers. The stories about puking customers are plenty.

It’s 58€ a month but still much cheaper than calling a Robotaxi every day.

Sensors would get cheaper with time. It's like 20 years ago traditional taxis saying they shouldn't use vision because those nvidia chips are super expensive. Maybe that's tesla plan. Fake the progress and then eventually saying oh we going lidar when it's dirt cheap. HW3 can't support robotaxi, they'll say same for Hw4 and hw5.

Your EV has to have downtime to charge. Elon once claimed that while you’re home sleeping, your car can be out making you money. Yeah, and then you get in your car to go to work to the next morning and find: 1. It needs a charge, and 2. It reeks of puke and Axe body spray from the frat boys that were in it at 2am.

Ew, what if someone spread bedbugs to your car?

There is no Robotaxi. There will be no Robotaxi. It's just a fake like Optimus.

The whole thing is BS, from the tech to the business model

Don’t forget public transport. As cities grow, so does their public transport network and for example the city I used to live (Vienna) didn’t have a nightly subway, so all of them stopped around midnight and started again around 5AM-ish. Nowadays there‘s at least some trains running on the weekends and the days before public holidays. Previously, Taxis would‘ve picked up a lot more people, because there wasn’t a convenient way to get home. But with the city growing, lines are going to be run at denser intervalls , new lines are built, etc. I don’t think the taxi will grow significantly, because public transport is going to scale up as well (at least outside the US)

Why would anyone listen to ARK/Cathie Wood? She‘s a total lunatic who never really made money. Take the 5-year comparison with the S&P 500. The S&P500 is at +113%, ARK is at -3.84% Literally putting your money in a low-yield savings would’ve netted you more money.

There‘s this page that tracked all of elons claims https://elonmusk.today/ It’s actually insane that he‘s not being sued into oblivion. Roadster alone is insane. They‘re not even showing to on their portfolio renders, even though the other vaporware cars are on there

Do they not have people in charge of product.  Yes, he is a control freak, but he is the only one allowed to make these decisions?  Does he hire yes men?  Does he just ignore them?

Your guess is as good as mine. Things usually work out if have focused initiaves.

All Elmo Hype.

A lot of people hate Elon and Tesla and want to take it out on the cars.  Now they want the random public to be able to summon a Tesla to them.  Good luck with that

I’ve been making your exact argument since uber first said they were going driverless 10 years ago. The problem is you’ll never see this point made in financial media, who are either corrupt or exceptionally dumb. Instead I’ve seen them write over and over, with all these driverless cab schemes, that replacing the driver’s share is pure profit. Never once mentioning the driver brings the car, fuel, insurance, cleaning and maintenance. And every time these articles get published the stock price is juiced. Even with Waymo, which actually works, I’d love to see their actual profit considering how expensive the car is. Some estimates have the car driving 500,000 miles before it becomes profitable when all costs are factored in. That’s why uber dropped the driverless car. After getting the stock price juiced from the hype, they realized there’s nothing better than being a middleman for a fee. They bring an app and a customer base and millions of others do all the dirty work and pay for the other inputs. Also, uber eats I believe now makes a lot more profit than uber rides, which makes so much sense. They add to each menu item a few dollars and don’t have to cook the food. It makes their delivery fees look lower and the restaurant look more expensive. It has become a cash cow because we are lazy and will pay a lot more to avoid driving for pickup. Everyone is so focused on will Robotaxi even work they aren’t asking how much money is there really to be made here? Parts of that are hard to predict, like market share, but I don’t think it’s nearly enough to justify the stock price.

Sorry to necromance the thread, but I just had to give you a standing ovation for that rant.\ Man, I haven't laughed like that in a minute, well done!  👏😂👍