Prominent short seller Jim Chanos has criticized Tesla Inc.‘s robotaxi economic projections, calling the figures “ridiculous” due to excessive costs. Chanos highlighted several overlooked cost factors, including:
- Roughly half of all ride-hailing miles are “dead” (non-revenue) miles
- Commercial auto insurance costs 3-4 times personal auto insurance, approximately 30-40 cents per mile
- Additional expenses for cleaning, estimated at $400 per month
Overlooked Costs
Chanos argued that the major cost for a Robotaxi fleet would be redundancy, safety, and monitoring, which could range from $0.05 to $2.35 per mile, depending on regulations. He also questioned the viability of Tesla’s projections, pointing out that the entire US taxi and ridesharing market is expected to be valued at $50 billion to $75 billion in 2024.
Doubts Over Revenue Projections
When challenged about potential higher revenue, Chanos expressed doubt, citing consumers’ ability to operate their own vehicles at a marginal cost of 50-60 cents per mile. He noted that “commoditized service markets tend to converge revenues to marginal cost.”
Tesla’s Robotaxi Launch
Tesla has been preparing for its limited robotaxi launch in Austin this June, with CEO Elon Musk announcing plans to deploy only 10-20 vehicles initially. The company has already launched an employee-only autonomous ride-hailing service in Austin and San Francisco, completing over 1,500 trips covering 15,000 miles.
Skepticism from Investors and Experts
Investor Gary Black recently described the upcoming launch as “an experiment” rather than a true market test, citing the limited deployment and “asymmetry of risks.” Former Waymo CEO John Krafcik has also questioned Tesla’s readiness for autonomous taxi operations.
Intensified Testing Efforts
Despite skepticism, Tesla has intensified testing efforts with approximately 300 drivers in Austin under “Project Rodeo,” while collaborating with local emergency services and developing its robotaxi app for the planned June 1 launch.
Conclusion
The success of Tesla’s robotaxi plan remains uncertain, with many experts and investors expressing doubts over the company’s revenue projections and ability to navigate the complex regulatory landscape. As the launch date approaches, all eyes will be on Tesla to see if it can prove its critics wrong and make its robotaxi vision a reality.