A Self Driving Future
October 17th, 2019Imagine a future where transportation is quick and even quicker when you plan ahead. You need a car and one shows up instantly to take you wherever you want to go.
On a $40,700 Tesla Model 3 leased today, Tesla will collect $6,289 +$2,500 +($399 * 36) = $23,153 for leasing the car to a customer for 3 years.
Assuming Tesla has a 20% markup on the car, the cost for Tesla to produce this car would be ~$34K.
After the 3 year term, users are not given the option to buy out the vehicle. It is returned to Tesla.
At which point the car will have cost $34K to make - $23K which they absorb through the lease = $11K for a 3 year old Standard Range+ Model 3.
Assuming FSD was never purchsed, Tesla can enable it for free. And add this vehicle to the Robotaxi fleet.
Charging $0.18/mile, Tesla could turn proft on this car in 39,150 miles.
At that price, 4 (or even 5) adults could go from New York to L.A. for $502.14, or $125/person.
But for shorter distances, you could charge $0.50/mile or cut Uber's rates in half and charge $1/mile.
Assuming there are 200K miles left on the car (because each lease owner drives 100K miles/year), it could turn Tesla's $11K Model 3 expense into $94.5K profit if they monetise half the miles.
There are maintenance and fuel expenses as well. But Tesla would have wholesale cost on that and even utilize extra Service Tech capacity. Those expenses are much less than a gas car so I am going to ignore them.
If Tesla leases 50,000 Model 3's, when they get these cars back, they can turn them into $4.7B of revenue.
And that is with the current battery technology. If Tesla were to do the same with a 1M mile battery, instead of 200K miles left on the car, you would have 700K miles left.
And for 50,000 Model 3's with those longer life batteries, Tesla could make $17B monetizing half the miles at half Uber's rate/mile.
So... good for Tesla. And with so much to gain, it will likely happen. But what other businesses will grow because of this?
Tunnels perhaps? High speed direct tunnels. Underground Service Centres and Food Courts.
Anything not owned by Elon? I will have to give it some more thought.
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ABOUT THE AUTHOR:Software Developer always striving to be better. Learn from others' mistakes, learn by doing, fail fast, maximize productivity, and really think hard about good defaults. Computer developers have the power to add an entire infinite dimension with a single Int (or maybe BigInt). The least we can do with that power is be creative.
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