Tesla bull ARK expects ‘multi-trillion’ dollar Robotaxi to dominate Uber, Lyft starting 2025

Tesla bull ARK Invest released a more extensive prediction on the automaker’s plans to launch a Robotaxi fleet next year.

The firm said it expects the Robotaxi platform to be a “multi-trillion dollar” opportunity and believes it could dominate long-standing rideshare companies like Uber and Lyft.

Tesla and CEO Elon Musk said at both the “We, Robot” event and the Q3 2024 Earnings Call that they expect autonomous ridesharing to be approved for operation in both California and Texas next year.

This would effectively launch the Tesla Robotaxi platform, but not necessarily the Cybercab that it unveiled at the event on October 10.

Instead, it will utilize the vehicles it has already built for the Robotaxi fleet. Hardware 4 vehicles will be what Tesla expects to use for Robotaxi, as Hardware 3 vehicles and their ability to handle the self-driving capability remain up in the air.

Tesla Robotaxi represents $1T in value, Musk to address near-term pain points: Wedbush

Tesla still has a lot of work to do before it can offer these driverless rides, and it starts with solving its in-house Full Self-Driving suite. However, ARK believes the financials will greatly benefit from the prospective value of a driverless Robotaxi platform.

This, along with a less-expensive vehicle that Tesla also plans to build in the first half of 2025, will help address and potentially unlock trillions in revenue, ARK says:

“In our view, Tesla should enjoy a price umbrella at its robotaxi launch, thanks to the high level of current ride-hail prices, as shown below, while leveraging a lower cost per mile than the average vehicle on the road. Why? The operating costs associated with electric vehicles are roughly one-third those of their gas-powered counterparts.⁴ Without safety drivers, Tesla has suggested that, at scale, its robotaxi rides will cost consumers only $0.30-0.40 cents per mile,⁵ slightly higher than ARK’s estimate of ~$0.25 per mile but well below current ride-hail costs of ~$2 per mile and personal car ownership costs of ~$0.70 per mile.⁶ Lower price points could unlock ~$11 trillion in revenue potential, ~80 times larger than the addressable market that Uber and Lyft target today, as shown below.”

Earlier this year, ARK remained with a similar narrative, expecting a ten-fold surge on Wall Street from Tesla, which is mostly due to the Robotaxi fleet’s potential to be a disruptor in the overall automotive sector.

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