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Robotaxis. Car rides are a big market. There are 2 billion cars on the road. If 10% of car rides are done in a robotaxi, that is over 200 million rides a day
by ArtTimeInvestor 3y ago
Robotaxis.
Car rides are a big market.
There are 2 billion cars on the road.
If 10% of car rides are done in a robotaxi, that is over 200 million rides a day, over 70 billion rides a year.
Sell a ride for $10 and that's a 700 billion dollar market.
Capture 10% of that and you make $70B a year.
One taxi can do over 100 rides a month. That is $1000 in revenue. Operating cost should be less than half of that.
So you have 50% margin: $35B profit per year.
At a p/e of 30, that is over $1T market cap.
Teslas current market cap is $700B.
- dkrich 3y agoI can’t tell if this is sincere or a joke.
- lvncelot 3y agoIt kind of reads like some sort of VC version of the Drake Equation.
- consp 3y agoThis is simply "calculating yourself into richness", and in the mean time forgetting a lot of cost and failure modes. If you can get money from a VC that way the joke is on the VC.
- adhesive_wombat 3y agoI've heard the same flavour of equations from everyone I've ever heard talking about starting a company. One guy was calculating that if he sold his gadget to "just" 10% of people in Africa, he'd make so much money. Spoiler: he did not sell a thing to 10% of people in Africa.
- bagels 3y agoRobotaxi is not a foregone conclusion. Maybe they'll pull it off. I don't know if there's going to be a giant leap like GPT, or a continued slow indefinite grind like we've seen so far with self driving. I'd be skeptical of anyone who claims to know unless they've already accomplished it.
- ArtTimeInvestor 3y agoI think it is. The current generation of neural networks already seem to do pattern recognition better than humans. And that is all that is needed to press the brake in a dangerous situation. All that is needed is to train them on enough examples of different situations that occur on the road.
- bagels 3y agoI think, as Cruise found out, you can't have priors for everything (eg. don't drag a pedestrian you ran over down the road).
- ArtTimeInvestor 3y agoYou only need more priors than humans have in their mind. As I said, neural nets are already good at pattern recognition. That is all that is needed to recognise you ran over someone. Humans are still better at long reasoning sessions. Aka "thinking something through". But that is not involved in recognizing you ran over someone.
- alienicecream 3y agoYou think a human wouldn't drag another human under their car because they've pattern recognized that from a prior example?
- ArtTimeInvestor 3y agoNot just one example. They learned from many examples that dragging someone or something along is not a good thing.
- alienicecream 3y agoI've seen examples of humans beings shot out of cannons where they were perfectly fine afterwards and the crowd applauded. I haven't seen any examples of people being shot out of cannons where they were not fine afterwards. Should I shoot people out of cannons?
- NhanH 3y agoYou are claiming thay current human driven taxi/ car rides market are making 700 billion dollar profit per year (70B / 10%) They don’t
- ArtTimeInvestor 3y agoNot profit. Cost. Using robotaxis is going to cost less than operating your own car. The cost of operating the current car fleet is way higher than $700B. Buying the cars alone is higher. There are 70M new cars on the road each year. At $10,000 per car, that would already be $700B.
- bagels 3y agoWhy would it cost less? What is the difference in utility of a robotaxi and a meat taxi besides maybe a reduction in cost per ride (how much is labor vs. non-labor cost), and why isn't everyone using Uber to get everywhere now? The robotaxi vehicle still needs to be manufactured, purchased, financed, maintained, fueled, insured, with room for profit for the robotaxi company. None of these things are free.
- ArtTimeInvestor 3y agoCapacity utilization will make using a robotaxi multiple times cheaper than owning a car. You car stands still most of the time. A robotaxi can drive most of the time. Automation and economies of scale (maintenance, repair, cleaning, charging) will also contribute to the lower cost of a robotaxi fleet compared to privately owned cars.
- bagels 3y agoWhy will people choose robotaxi who are not currently using Uber?
- ArtTimeInvestor 3y agoBecause the robotaxi arrives faster, is cheaper, safer and more convenient.
- ben_w 3y agoGiven what's happening with all the rest of AI, I suspect the demand for commuting is going to go down by the time robo-taxis are viable. Will robots that lead to less commuting be simply balanced with more fun trips for similar revenue potential, or will they lead to a complete shift of world economics that means the money stops being meaningfully comparable to today's?
- ArtTimeInvestor 3y agoRobotaxis will bring down the price of rides. That means the number of rides will go up. Less people will commute to work. But more people will meet for a coffee and order stuff online which then gets delivered in 30 minutes by a robotaxi.
- the_other 3y ago> Less people will commute to work. But more people will meet for a coffee and order stuff online which then gets delivered in 30 minutes by a robotaxi. We havn’t ever seen a situation where a reduction in the cost of work lead to less work being done. What happens is that employers (and the market) demand more work, and only labour law holds back the demand that employees work all their waking hours. You’ll probably respond that UBI will give everyone all the free time they want… but capital owners will have to fund UBI through tax. And capital HATES paying tax. This feels like stuck gears to me. What am I missing?
- ben_w 3y ago> You’ll probably respond that UBI will give everyone all the free time they want… but capital owners will have to fund UBI through tax. And capital HATES paying tax. > This feels like stuck gears to me. What am I missing? Communism. Or at least, some variant of it. If your government owns the full automation and operates it for the citizens, that's much the same as the upper limiting case of a corporation owning the same full automation for the benefit of the shareholders. (I'd say "and this time nobody needs to go to the gulags", but having the government aligned with the citizens is a separate problem: any given state might get it right, or history might rhyme).
- hef19898 3y agoWhich is exactly ehat Tesla did trying to maintain a "tech" market cap instead of defaulting back to a more realistic car maker one. Among other things.
- u320 3y agoIt trivial to project big profits if you assume a monopoly. The problem is that it's true for any sector, you have to justify why Tesla is the one to achieve it or else your numbers are meaningless.
- amitrip 3y ago[dead]
- poisonborz 3y agoIf you are truly an investor as per your username and the above is your serious reasoning for buying Tesla stock...
- crq-yml 3y agoThe players deploying robotaxi right now are entering a market that resembles shared micromobility(scooter, e-bike) - what they need is not just vehicles, but to get on the side of the appropriate regulatory bodies and to get eyeballs on the product. It's a fight won one city at a time, and it favors partnering with companies like Uber that have built experience in both of those aspects. This is a fight that Tesla doesn't seem to be engaged with - it's staying on the manufacturing side of the issue. Its opponents are going to see this as a gun they can fire to shut out Tesla's supply-centric economics: install regulations on robotaxi - vehicle form factor, signals, testing - that make it impossible for anyone but a well-capitalized player to enter. Then it doesn't matter how cheap the vehicle gets if the other costs required to operate legally keep small players out. Tesla's recourse in this market is to either sell a commodity product that passes regulation, which is terrible for their bottom line, or to become a robotaxi company themselves, which is not unfeasible(they have the Supercharger network, they can grow more vertically) but which they aren't currently aimed for. If they did that the fast path would be to find a ridehail partner and acquire them. I believe in the robotaxi concept, but I don't think it's settled as to what form it ultimately takes.
- ArtTimeInvestor 3y agoI'm sure that if Tesla creates the best robotaxi software, it will find its way onto the road one way or another. My feeling is that they will operate the robotaxi fleet themselves. But they might also just sell or rent the cars. Or even just the software.