Tesla: Endgame Part Deux

A while back and in April I wrote about my thoughts on where Elon Musk wants to ultimately take Tesla and their electric vehicles (click here for the original post, Tesla: Endgame).

My feeling was that Mr. Musk is thinking farther ahead than most car makers in the sense that he feels we will eventually have self-driving vehicles and, because of that, we will have a version of the Uber/Lyft system where a company will have a fleet of self-driving vehicles roaming around a city (at first) and the company will make a lot more money on those vehicles while consumers will not need to actually buy cars. It will become more economical to order a self-driving vehicle, have it take you wherever you need to go, then when you’re done order another to take you back.

No more buying cars, no more insurance, no more monthly lease payments, and no more worrying about changing tires/servicing your vehicle.

A recent tweet over the weekend caused some consternation among folks when Mr. Musk was asked by “Disruption Research”:

Do consumers have limited time left to buy a Tesla car, since prices would have to go up severalfold to balance supply & demand once you solve FSD?

To which Mr. Musk replied curtly:

Yes

The consternation was due to the fact one could interpret Mr. Musk’s response to indicate Tesla might not sell cars at all once the self-driving thing was resolved. Mr. Musk, perhaps sensing a rising panic, offered the following elaboration:

To be clear, consumers will still be able to buy a Tesla, but the clearing price will rise significantly, as a fully autonomous car that can function as a robotaxi is several times more valuable than a non-autonomous car

In other words, once/if Tesla resolves self-driving and if you have a self-driving vehicle, you have a potential money maker, one that you could send out when not using it as a “robo-taxi” and make money off of it.

So Mr. Musk notes rather bluntly: Why sell a Model 3 for, say, $50,000 (or thereabouts) when you could make that much money on the vehicle -or more!- in a year by sending it out as a robo-taxi? If/when Tesla gets the self-driving realized, they aren’t going to be selling their vehicles at the current prices because they are now potential money makers.

And that dovetails nicely into what I wrote in my original Tesla: Endgame post.

Here’s the thing: Until full self-driving is realized, Tesla still has to sell vehicles and continue doing so to make money it needs to continue its research.

When I purchased my Tesla earlier this year, I invested in the “self-driving” feature. It was, I believe, something like $5000 or so and didn’t think about using the car as a “robo-taxi.” Frankly, I did so because I thought it would be fascinating to have a car that can drive itself.

Having said that, if there’s good money into making my car a “robo-taxi”, I might be tempted to let it be used as such!

Once again, this is something that depends entirely on when -and if– a fully functional self-driving feature becomes a reality.

Mr. Musk is optimistic it will happen, perhaps as soon as later this very year.

I don’t think it’ll happen that quickly, but in the next two or three years?

It’s certainly possible.

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