While Elon Musk has promised to deliver self-driving cars for over a decade, autonomous driving is the last crucial step before Tesla launches the Tesla Network: its own in-house rideshare service. The long-teased service could be the Holy Grail of revenue streams for the automaker. There would be no drivers to pay immorally low wages, and the fleet would consist of vehicles already purchased by customers. It’s a dystopian dream of double-dipping revenue.
“Master Plan, Part Deux” was the first concrete mention of a Tesla robotaxi. The 2016 blog post, which is no longer published on the automaker’s website, outlined a concept where Tesla owners could add their car to a self-driving rideshare fleet to completely offset the purchase or lease cost. Musk wrote:
“When true self-driving is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere. Once it picks you up, you will be able to sleep, read or do anything else enroute to your destination.”
“You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla. Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not.”
“In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are.”
The robotaxi idea would reappear a few months later during Tesla’s Q3 earnings call. Musk positioned the prospect directly in opposition to Uber and Lyft as well as the exploitive practices used by the established rideshare giants. He even claimed the majority of the generated revenue would go to the vehicle owners. Musk said:
“This would be something that would be a significant offset on the cost of ownership of a car and then a revenue generator for Tesla as well. Obviously, the majority of the economics would go to the owner of the car. Sometimes, it’s been characterized as Tesla versus Uber or Lyft or something like that. It’s not Tesla versus Uber; it’s the people versus Uber.”
A new talking point hit the forefront when Musk was interviewed at TED2017 by Chris Anderson, TED’s Head Curator. Musk stated that robotaxis would be more affordable than riding the bus. He seemed to be referencing a 2016 study that estimated a driverless ride in a Model 3 would cost $0.663 per mile. Musk said:
“A lot of people think that once you make cars autonomous that they’ll be able to go faster and that will alleviate congestion and to some degree that will be true. But once you have shared autonomy where it’s much cheaper to go by car. And you can go point to point. The affordability of going in a car will be better than that of a bus. Like, it would cost less than a bus ticket. So the amount of driving that will occur will be much greater with shared autonomy and actually, traffic will get far worse.”
Musk further explained his rideshare idea during Tesla’s 2018 Q3 earnings call. He compared the service to both Uber and Airbnb. Uber in that Tesla would have to operate its own fleet to satisfy demand in high-traffic areas, and Airbnb because privately-owned vehicles would be the fleet’s backbone. Musk said:
“Great, thank you. Again - actually I’ve said this before, what I think - just talking a bit about the kind of long-term future, we absolutely see the future as kind of - as sort of a shared electric autonomy. So that you’ll be able to do ride-hailing or share your car anyway, sort of long-term model that’s some combination of like Uber, Lyft and Airbnb. There will be Tesla dedicated cars for ride-hailing and there will be - and any customer will be able to share their car at will, just like you share your house in Airbnb. So it’s a combination of those two models. I think, it’s pretty obviously where things are headed long-term.”
“The advantage that Tesla will have is that we will have millions of cars in the field with full autonomy capability, and no one else will have that. So I think that puts us - that will end up putting us in the strongest competitive position long-term.”
When 2020 came, Musk took to Twitter to explain thatj vehicles were equipped with the capability to be robotaxis and the automakers were just waiting for the regulators to allow the technology’s use. He posted, “Functionality still looking good for this year. Regulatory approval is the big unknown.”
Two years later, there were still no Tesla robotaxis on the road. Musk still expected that Tesla would soon begin production of its dedicated fleet for the service, robotaxis with no steering wheels or pedals. Musk explained during Tesla’s 2022 Q1 earnings call:
“We’re also working on a new vehicle that I alluded to at the Giga Texas opening, which is a dedicated robotaxi. That’s highly optimized for autonomy, meaning it would not have steering wheel or pedals. And there are a number of other innovations around it that I think are quite exciting. That is fundamentally optimized for — trying to achieve the lowest fully considered cost per mile or cost per kilometer, accounting everything.”
“We don’t want to jump the gun on an exciting product announcement too much. So, I think, we’ll aim to — we do a product event for robotaxi next year and get into more detail, but we are aiming for volume production in 2024.”
Despite telling investors that Tesla’s $25,000 vehicle would enter production in 2025, Musk purportedly canceled the long-awaited Model 2 in February 2025. The move was part of a shift in the automaker’s focus towards the robotaxi. However, Musk claimed that the report published by Reuters was a lie and that the news agency was dying.
By July, Tesla delayed the planned August 8 reveal of the wishfully lucrative robotaxi. The automaker’s employees were made aware of the delay through internal communications. Tesla stated it needed more time to build the prototypes that would be unveiled.
Tesla finally revealed its two dedicated robotaxi concepts during an October event at Warner Bros. Studios in Los Angeles. The Cybercab is a small $30,000 two-seater with similar design elements to the Cybertruck, except the angular edges were replaced with a more streamlined look. The Robovan is essentially a driverless bus that seats up to 20 people and looks like a ‘90s sci-fi movie prop.
The biggest reveal at the event is that we have no idea when either robotaxi will hit the road. Musk said the Cybercab would be available before 2027 but admitted he can be a “little optimistic with timeframes.”