- Elon Musk said Monday that Tesla would have 1 million autonomous taxis on the road “next year.”
- Wall Street analysts, investors, and other industry insiders were skeptical, given Musk’s history with overpromising.
- Jim Cramer of CNBC’s “Fast Money,” once a Tesla bull, compared Musk to the great showman PT Barnum.
Elon Musk unveiled grand plans for Tesla’s network of robo-taxis on Monday, with his sights set on a million autonomous electric vehicles shuttling passengers within a year.
“I feel very confident predicting 1 million autonomous robo-taxis for Tesla next year,” Musk told a room of investors and Wall Street analysts at the company’s Palo Alto, California, headquarters. “Not in all jurisdictions because we won’t have regulatory approval everywhere, but I’m confident we will have regulatory approval at least somewhere, literally next year. “
Tesla estimates the cost of running a robo-taxi on the “Tesla Network,” onto which the company says all Tesla owners will be able to add their cars, to be less than $0.18 a mile. Tesla went on to predict that a sample fare of $1 a mile would translate to $30,000 in annual profit for a single car. That would add up to $30 billion for the 1 million cars Musk predicted would soon be running.
"Expect this to operate sort of like a combination of the Uber and the Airbnb model," Musk said. "So if you own the car, you can add or subtract it to the Tesla network and Tesla would take 15 or 20% of the revenue. In places where there aren't enough people sharing their cars we would just have dedicated Tesla vehicles."
Autonomy is key for ride-hailing, and not just for Tesla. Uber and Lyft, easily the two biggest companies in the space, are spending huge chunks of their revenue on paying drivers. Many Wall Street analysts have suggested that with self-driving cars, that expense could be minimized, giving both companies a gateway to profitability.
Of course, not everyone was so quick to accept Musk's vision. The billionaire, after all, has a track record of making grandiose promises that don't pan out on the same scale or timeline. Jim Cramer of CNBC went so far on the air as to compare Musk to the circus leader PT Barnum.
Wall Street analysts were also underwhelmed.
"The Tesla Network robotaxi plans seemed half baked, with the company appearing to either not have answers to or not even considered pretty basic question on the pricing, insurance liability, or regulatory and legal requirements," Jeff Osborne, an analyst at Cowen, said in a note to clients on Tuesday.
"We see the focus on FSD as a desperate attempt to convince Tesla car buyers to pay the $8,000 for the "FSD" option, even though the company acknowledges the software doesn't work and they will have a new next-gen solution in ~2 years."
More from Tesla's autonomy day event:
- Elon Musk says it's 'basically crazy to buy any other car but a Tesla'
- Tesla is taking direct aim at Uber and Lyft with claims it plans to roll out 1 million robo-taxis by next year
- Elon Musk slams rivals' self-driving-car tech, says 'anyone relying on lidar is doomed'
- Tesla claims it has made the 'best chip in the world' for self-driving cars at its autonomy day event