Tesla’s recent ‘We, Robot’ event, showcasing advancements in autonomous vehicles, has ignited a lively discussion about the future of this technology. While the event highlighted impressive progress, particularly with the unveiling of the two-seater Cybercab and 20-seater Robovan, it also sparked debate about the timeline and challenges of achieving fully autonomous driving.
Gene Munster, managing partner at Deepwater Asset Management, shared his insights on the event and its implications for Tesla. Based on his observations, Munster believes that autonomous driving could revolutionize transportation, but it will likely take longer than initially anticipated. He cites several key takeaways from the event:
The Potential of Autonomous Vehicles:
Munster emphasizes the significant potential benefits of autonomous driving, including cost savings, increased vehicle utilization, and reduced traffic congestion. He estimates that autonomous fleets could lower the cost per mile by 65-75%, while also generating significant personal value due to the time saved from not driving. In the US alone, he believes this could translate to tens of thousands of lives saved and hundreds of billions of hours regained annually.
The Challenges of Implementing Autonomous Driving:
Despite the advantages, Munster acknowledges the complex challenges facing the adoption of fully autonomous vehicles. He highlights the ongoing need to address safety concerns, regulatory hurdles, and the need for further technological development. While he acknowledges a possible breakthrough in the near future, similar to the rise of ChatGPT, he believes the current trends and regulatory landscape suggest that fully autonomous driving is likely to be slower than initially projected.
Impact on Tesla’s Revenue:
Munster predicts that a nationwide Robotaxi fleet could contribute significantly to Tesla’s operating income by 2030. He anticipates that Tesla could achieve a 50% market share in the Robotaxi sector by 2030, generating an estimated $4.5 billion in operating income. He anticipates that Tesla will strategically price its Robotaxi service at a 25% discount compared to competitors, aiming to capture a significant market share in a price-sensitive environment.
Unsupervised FSD’s Potential:
Munster sees the greatest potential for Tesla in unsupervised FSD, as it could lead to increased car sales and market share. Additionally, licensing FSD technology to other automakers could become a substantial revenue stream for Tesla. The event showcased the company’s dedication to advancing autonomous driving technology, but also highlighted the challenges and uncertainties that remain. While the future of autonomous driving is promising, Munster’s analysis suggests that achieving widespread adoption will take time and require continued innovation and collaboration within the industry. As Tesla and other companies continue to develop and refine this technology, the impact on the transportation industry and the economy will be substantial.
