Why doesn’t Taesla run all the robotaxi herself?
In a way, it’s a natural question. The company has all the profits from the robotaxi, so why would they want to distribute them to the general public? But even yesterday, Elon clearly said he would sell all of the robotaxi without running them himself. Is it an angel?
Not an angel, of course. Let’s see why Tesla might be a better strategy to run a robotaxi and do both, selling it to the general public and the company (just a guess).
- First of all, the biggest problem is that the demand for robotaxi is not constant. When will there be a lot of demand? Of course, it is rush hour, especially rush hour. At 3-4 a.m., demand is much lower. So, should Tesla match the supply of robotaxi to the maximum or minimum of demand?
It’s a difficult problem. If a certain city supplies maximum, or robo-taxi properly at rush hour, it’s wasteful because there will be many robo-taxis resting when there’s no demand. If you set it to Minimum, you miss a lot of sales because the supply is insufficient during rush hour.
If so, two polarization strategies will emerge.
A. Tesla’s own RoboTaxi is designed to meet minimal demand, and when demand rises, how to solve it with the general public’s RoboTaxi
B. How to meet minimal demand with a robotaxi operated by ordinary people and solve it with Tesla’s robotaxi when demand rises.
(Of course, you can mix it, but let’s look at the poles first.)
A is a better strategy, I believe. It is an unfair game because if supply exceeds demand, the general public’s robotaxi and Tesla’s own robotaxi must compete. Even if the algorithm does not make it more advantageous, if the data on when, who, and where to ride is much more accurate and perfect, individual predictions can be made. Tesla can, of course, create a slanted playground if it wants.
But Elon Musk has said the opposite in the past. The general public runs a robotaxi, and if demand is high, he will release Tesla’s fleets himself. In other words, Elon is leaning more towards B. Then I think Tesla may not want to run too many robotaxi for the reasons underneath.
- What if NHTSA or regulatory agencies suspend all robo-taxi?
Previously, a cruise self-driving car stopped operating in a California DMV after an accident.
nbcnews.com/tech/cruise-se…
A single accident like this could result in a nationwide business suspension. Self-driving is impossible not to cause an accident. It only pays less than humans. Just as there is an image of Tesla cars being more vulnerable to fire because of the media, even though they are dozens of times less likely to catch fire, let’s say that even if they are safer than humans, regulators stop business because of public opinion. Then
Average price of a robo-taxi = $25,000
Assuming a five-year straight line depreciation, the annual depreciation (without the salary value) = $5,000
If 2 million robo-taxis are suspended for 6 months, the depreciation cost from here is only $5 billion. If Tesla runs a robo-taxi directly, it must absorb $5 billion of expense on the ledger without sales of the robo-taxi.
But what if taxis are owned by the general public? The $5 billion depreciation doesn’t exist on Tesla’s books.
Therefore, if you are afraid of the risk in a situation where the media and regulators do not know how it will come out, it is safer to hand it over to the robotaxi operator. Of course, profits decrease. Again, it is lower risk, lower return, higher risk, and higher return, but I think the regulators will definitely argue with it someday.
- What if a customer throws up in a robotaxi? Everyone who runs the property talks in chorus. There’s more to do than you think. RoboTaxi must be similar. There will be a drunken rampage, someone says they left their wallet in the car, someone steals it… There will be all sorts of things, but does Tesla have to set up a support center and solve it all? Also, should Tesla change its own tires, change its wipers, and maintain them? A city center could run them efficiently, but what about a very densely populated state like Idaho?
There will be more troubles than you think. Tesla may have strategized to run a robotaxi only in places where commuting demand is meaningfully rising due to the high population density.
Of course, at first, I think Tesla will run it itself. Then, isn’t it a strategy that allows ordinary people to run a robotaxi when they want to expand? It’s just a speculation for fun. I don’t know the answer.