Both. One has to ask if an autonomous driving future is likely. I can make a judgement call on this based upon my Tesla driving experience. I think it is likely. From there it is about who can capture that market and when. I think Tesla is going down the path starting June in Austin. So I am biased towards TSLA but am happy to consider other products and companies. TSLA though already has a production base.
That is not my experience. My car does it all except for my stone driveway, and it did that a couple weeks ago. I see no need for LIDAR. Cameras only as it is drives better and safer than myself.
If you can't take a nap in the back seat then you're simply trolling here. You don't even own it yet so what's your point?
Regulatory arb as a 12yo explaining it here... it won't matter as the market will determine safety. Wait until one of them rams into a school bus. Tesla will open 50% lower. What is with you MAGA and your love for the autiste? There are other stocks. I've seen 'em. Hit me up with the wager.
The long form letter linked above Thoughts on a Self-Driving Taxi Service I have a few thoughts on how significant an innovation the new, self-driving taxis soon to be released by Tesla will be for society. I feel it will be a major change to the world, similar to the change that happened when Uber rapidly scaled around the world. But first, let me start with a related story. SpaceX has about 7,000 Starlink satellites now in orbit around the Earth, and about 5 million customers. It is incredibly profitable, and revenues are rumored to be on the order of $12 billion for 2024 and maybe $25-$30 billion for 2025. And Starlink is still growing very fast as they will start launching about 52 satellites at a time using the new, huge Starship rocket in 2025 and the additional satellites will give them the capacity to take on more customers. Each of the new Starship launches will provide about 20 times the bandwidth provided by the Falcon 9 rockets they are launching today, both due to more satellites on each launch and bigger satellites with more bandwidth capability. They plan to get to 14,000 satellites and then maybe as many as 30,000 satellites in orbit in the future. But SpaceX was not the first one to work on the idea of many satellites in low earth orbit to provide communication services. AT&T worked on it as early as the 1970's. And Bill Gates and Craig McCaw, the cellular phone king, funded a company called Teledesic starting in 1994. Motorola and others launched about 60 satellites in a service called Iridium around 2000, and GlobalStar put up about 40 satellites, and then OneWeb and others. But all these companies went bankrupt. So why did Elon Musk succeed stupendously when these other well-funded ventures failed? AT&T was one of the largest companies in the world after all, with Bell Labs behind them. If any group knows the communication business, it is AT&T and Bell Labs. Well, Elon had all the parts that he needed, and all integrated together. He had his own rockets to launch the satellites and the rockets were reusable, so the launches cost on the order of $20 million each rather than $100 million or more that the other systems had to pay to launch their satellites. He had worked for 15 years to get his rockets developed and make them reusable before starting the satellite program. And he put 20 satellites or more on each launch, whereas the other systems had 1 or 2 or 4 satellites on each rocket. And Elon made a factory to build his satellites, and he was building 5 per day, and he got the cost down to a rumored $1 million per satellite which is simply the parts and assembly cost. The other ventures went to satellite building firms, and these firms start their quotes at $100 million a satellite. So, it just took too much money for these other ventures, and they didn't get enough customers to pay for such huge capital expenses, and their systems went bankrupt. The key was to pull together all the parts needed for this system, which is often termed "vertical integration." Elon was able to put thousands of satellites up for $10 billion. And now Starlink is reputed to be worth around $250-$300 billion, and it will probably go up much more when it is spun off and goes public as Elon says he plans for the service. I bring up this story because I think Elon is about to do the same incredible thing again with the two-seat robotaxi that he plans to bring out in 2026. This robotaxi, also called the Cybercab, has half the parts of his Model 3 or Model Y cars. Tesla will be able to make them at a million per year starting production in 2026, and then 2 million and then 3 million per year. Tesla will be able to have a taxi service that can charge half as much as any taxi company or Uber or Waymo. And then when these competitors reduce their prices, Tesla will be able to halve their prices again. And because Tesla will be able to produce these cars at such a huge scale, and for maybe a cost for Tesla of $15,000 or $20,000 each, Elon will again be able to grab a huge market before the competitors are able to react in time. As Uber found, the first to provide a critical mass of cars to any city will dominate the service for that city going forward, May 11, 2025 and because Tesla will have such a large production rate, Tesla will be able to grab most of the cities in the US in short order, before competitors can have competing offerings out at scale. And with the ability to let customers' approximately 4 million Model 3 and Model Y cars in the US also in this service, Tesla will be able to lock up a huge market. Tesla will crowdsource the funding of the cars as the cars will be sold to customers that will then have their cars in the Tesla self-driving taxi fleet, and Tesla will take maybe 30% of the revenue with incredibly high returns on invested capital (ROIC) as they will have relatively little invested capital in the service. Elon will use his vertical integration and scale again to lock up most of a very large TAM (total available market). We will get our answer in 2025 when Tesla starts a paid self-driving taxi service in Texas this summer. Tesla is already using the service for employees in California, and debugging the user interface software to order cars, to take payments, to talk with a customer support specialist should it be needed, etc. I believe Tesla will rely heavily on Teleoperators for the cars. Not for driving safely as the required response time for safe driving is too fast, but as customer support to answer customer's questions, to help the car along when unexpected things like a traffic officer or a stalled car on the road is encountered. At first, I believe there will be 100 remote operators for 100 cars, then 100 remote operators for 200 cars, then for 400 cars, and 800 cars and then the same 100 remote operators for 1,600 cars and so on. This service will start in 2025, and we will be able to watch as they improve the customer interface software in 2025 and scale to many cities around the US by the end of 2025. And then they will be able to scale rapidly as the robotaxi's come off the line in 2026, and customer Model 3 and Y's are allowed into the service, at which time they will lock up the service in many cities across the US. For those interested in further depth on the self-driving taxi business, I have the following. The self- driving taxi service is made up of four key components. I will explain each of these below. 1. The manufacturing of the self-driving taxi automobile, which is basically a car with 8 cameras and a high powered inference computer on board. Tesla may dominate this sector at the beginning, but it is likely that other competitors come out with their own products eventually, either with technology licensed from Tesla or developed themselves or purchased from others. When competition comes into play, it is unlikely that this sector will be very profitable, and we have a long experience that such hardware has most of the profits driven out of it over the long-term by the resulting competition. 2. Self Driving Software on the vehicle - It is clear that the software to drive a self-driving car is difficult to develop and takes billions of dollars. This software will prove to be very profitable over the short- term, but it is likely that others besides Tesla will also be able to develop reasonable alternatives with low accident rates, and Waymo is proof that there is not only one way to make such software work. And Tesla will license their software to other car makers meaning that the value will be shared between Tesla and the other car maker. So, we can expect this sector to be very profitable at the beginning but eventually, this sector of the business will also most likely have significant competition and therefore the profits will be driven down. 3. The car that is providing the self-driving taxi service. Someone will have to pay for the car and be responsible for charging it every day, keeping it clean and well maintained, and parking it during off hours when there is very little demand for a taxi service such as in the middle of the night. Tesla may own some of the cars, but it is likely that Tesla outsources the huge capital expense of providing the thousands or hundreds of thousands of cars needed in different size cities. Individuals or small companies may purchase a few or fleets of hundreds of cars that they will maintain and put on the self- May 11, 2025 driving taxi service. As the providers of the capital, the owners of the car will make some of the profits, and some will be shared with the taxi service app. Providing the cars, the charging, maintenance, and overnight parking space has been one of the major limits to how fast Waymo can scale, but Tesla will have tens of thousands of people working in parallel on finding space to charge, maintain, and park the cars overnight. 4. And now we get to the most important and profitable sector of the self-driving taxi business, and that is the self-driving taxi service app on customers' phones. Once an app reaches a critical mass in each city, there will be self-reinforcing forcing functions causing the first company to dominate the city assuming that they can scale the supply of self-driving cars. The app that provides the greatest number of cars will have the shortest wait times for a car and that will be the app that everyone wants to use to call for a taxi. The taxi app has strong network effects, meaning that the more users it gets, the more valuable it becomes and the more that new users will want to join this app rather than a competitive app. As I said earlier, Uber has shown that once an app dominates a city, all customers get used to using that service, and it is difficult for a competing service to take market share with a similar price point. But Tesla will be able to provide a price point at half the cost of an Uber with a driver, and customers will flock to Tesla's self-driving taxi service, and then it will be hard for another company to take market share from Tesla at a price like Tesla's prices. This is why many analysts refer to this business as a "winner takes most" business. The app is also a platform, meaning that other services will be able to be built on top of this app, such as Uber Eats and Uber Package delivery have shown. For example, some customers will have delivery services to businesses in the middle of the night as the delivery costs will be very low when most of the self-driving taxi fleet is not in use. And many other businesses will come out of this app, with the owner of the app getting a share of the revenue. I believe Tesla will own the app and therefore dominate the self-driving taxi service in most cities across the US by 2028 or 2029. This will be an amazing amount of revenue because more and more of existing rides will transition to self- driving taxis as the cost for the taxi ride goes down from today's taxi costs of $2/mile to $1/ mile and $0.50 per mile and even lower and eventually undercut the cost of driving one's own car and then the cost of buses in many cities. Please do not hesitate to email me if you have any questions or comments on all of this. Best regards, Frank Yashar frank@yasharfamily.com Rev 1- Minor updates.
We'll know soon enough if there any there there. 16 days till month of June begins when "limited" rollout of Austin robotaxi service is supposed to commence.