So, does that mean that all the Tesla on the roads won't become robotaxis with a simple over the air update ?
But at least, Optimus is still scheduled to start serious work in factory right ? /s
On a more serious note, I don't get why people think robotaxi have such a huge business potential. Robotaxi are certainly the future - that's undenialable. But is it such a good business ?
I don't see many people ditching their cars for a Robotaxi. Those who would, don't own a car anwyay.
As for margins, it seems to me like it will be a race to 0, quite like airlines, with very little profit to be really made.
What is the point of making pretensious snob comments like this?
You are out of touch, less young people have their licenses than ever before. Car ownership, maintenance, and insurance are expensive. There is a huge market for people who would rather hail a robotaxi than buy a car. Companies like uber and lyft wouldn't be generating billions in revenue if that weren't the case.
I think at an even smaller scope than robotaxis, having a really convincing level 4 driver assist (dare I say "full self driving" mode) for general consumer vehicles is a decent value proposition. Both for prospective new car buyers and existing owners. EV adoption has still not reached saturation, so giving some compelling reason to buy a Tesla over another car is pretty big.
After a car rolls off the lot its hard to make money on it. Tesla is in a position to actually make money off this, provided their FSD offering is compelling enough. You can extract decently high margin recurring revenue from potential FSD subscriptions.
And despite their shortcomings, I think they are probably the closest auto OEM to making it happen, and they are clearly taking things pretty seriously (multi billion dollar GPU clusters, paying top dollar for talent, having a massive data edge, etc).
I think Waymo is the superior technology as of now, but in the short - medium term, having a compelling FSD product on a consumer car will probably benefit Tesla quite a lot. I'm not too sure how compelling a fully car-less (i.e people only commute via some company's robotaxi fleet) future is in the medium term though, and its business viability, but it seems like a not-unreasonable north star to work towards.
Do you think that there exists a big-enough market of consumers who will happily pay a recurring subscription for FSD-esque features in their car?
What would be the price point of such a subscription? I struggle to think of a cost that strikes the balance between value for money and me being suspicious of the quality of the service I'm getting. 100s of dollars could easily double or triple the monthly lease/loan which will directly impact the value-prop math we do do in our heads when buying a car. Tens of dollars will immediately make me suspicious of the quality of the service I'm getting.
I'm not so sure about any of this. My feeling is that the majority of consumers will not opt of such a subscription, especially if it's something "I can just do myself for free" (drive my car). I have no data to back this feeling though, so I'm curious to know what others think.
Margins would only be low if there are multiple companies with similarly good software.
But that is usually not what happens in the software space, especially for software that is expensive to build. Google still has its lead. About $200B in search revenue per year and still growing. Google's overall margin is 32% and the search business probably has an even higher margin.
Tesla has a good shot at becoming the first company to have a self-driving software that can run on vision alone.
People who live and/or work in city center where it's near-impossible to park. If the robocab could pick me up, drop me off and find the parking space outside the city center – that'd certainly be a great product.
The vision for robotaxis at this stage it pretty obvious and like you say undeniable - the profits though will be mostly there for those with first mover advantage that can make their brand name the verb for driving somewhere.
It didn't take great vision or foresight to see the uber app back in the early 2010's and see how things will play out vis-a-vis getting rid of the driver - and my money is still with them (literaly) from a brand name perspective only.
What does Uber have?
Except exceptional losses in the 50B range?
Like do they have any hardware at all?
The entire Selfdriving/Robotaxi space goes the same way that ASIC miners for bitcoin did - the producers find it most profitable to run it themselves while selling expensive hardware to end users.
> It didn't take great vision or foresight to see the uber app back in the early 2010's and see how things will play out vis-a-vis getting rid of the driver
It's not clear to me. The Uber we have today seems to be paying the third party drivers around cost price per kilometer, and doesn't have to allocate capital for purchasing vehicles, nor for cleaning or maintaining those vehicles. An Uber that had to buy a bunch of self-driving vehicles that they would also then have to maintain, clean, and service, seems like a worse, more risky, business than what they are running today.
Wait why "obviously"? Is this like how "obviously" the friends you have in an MLM scam must be making money? Or "obviously" Wall Street wasn't packaging dogshit "no job, no proof of income" mortgages as triple-A securities before the crash?
If by "obviously" you only mean "That seems dumb" then, yeah, welcome to planet Earth.
It's going to trigger a race to the bottom I think. Robotaxi is going to run into exactly the same challenges that Uber experienced back in the day: significant push-back from existing taxy industries.
In markets where they are allowed to operate they will compete directly with Uber which will probably drive down initial cost (consumers win), but the inevitable enshittification will no doubt take place, just making both options terrible.
The existing taxi industry has largely been crushed by Uber, while Uber would love nothing more than to get rid of pesky "driver-partners" who have the effrontery to demand annoying and expensive things like fair working conditions and health insurance. And this isn't just speculation, Uber has already announced a partnership with Waymo rolling out from 2025.
It's a great business. It's like Uber (which is worth $150 billion), but with 3x less costs. Taxi services are network effects that are extremely difficult to compete with, which is why the taxi industry is basically a duopoly now.
How will operating cost be 3x less compared to Uber?
Uber drivers are already low-wage earners in many instances, moving them all to a tele operator centre in a 3rd world country will not make that much of a difference I think. I also suspect the cars will be significantly more expensive compared to the typical Corrola or similar shitbox that Uber drivers prefer. And this cost won't be foisted on the driver, and will be a direct capex for Robotaxi. Charging, charging infra, maintenance and all that will also be a running cost that Uber does not have deal with.
How exactly is it 3x less costs? Uber drivers' margin is extremely low, it varies a bit between countries but after energy costs, maintenance/upkeep costs, vehicle acquisition cost and depreciation, etc. their take home pay is low. Pluck the driver out and you still have a car that needs maintenance and energy to run and savings are on the labour cost which Uber already pushed down as much as possible.
I don't see anywhere a way to get 3x less costs in this equation.
How does it compare to a car sharing company? It has all the same costs for the vehicle and the driver/pilot is free in both models, in one it is AI and the other it is just the user.
On a more serious note, I don't get why people think robotaxi have such a huge business potential. Robotaxi are certainly the future - that's undenialable. But is it such a good business ?
I don't see many people ditching their cars for a Robotaxi. Those who would, don't own a car anwyay. As for margins, it seems to me like it will be a race to 0, quite like airlines, with very little profit to be really made.
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