Prominent short seller Jim Chanos has criticized Tesla’s robotaxi economic projections, calling the figures “ridiculous” and pointing to several overlooked cost factors.
What Happened
Chanos highlighted that roughly half of all ride-hailing miles are “dead” (non-revenue) miles. He also noted that commercial auto insurance costs are significantly higher than personal auto insurance, at approximately 30-40 cents per mile, with additional expenses for cleaning at $400 per month.
Cost Factors
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. Chanos 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.
Revenue Concerns
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” and noting that “commoditized service markets tend to converge revenues to marginal cost.”
Expert Skepticism
Chanos is not alone in his skepticism. Investor Gary Black has 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.
Tesla’s Preparations
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
With Tesla’s limited robotaxi launch in Austin this June, the company is facing significant scrutiny over its economic projections. As the market waits to see how Tesla’s robotaxi service will perform, one thing is clear: the road to success will be paved with addressing the concerns of experts like Chanos and Black.
Additional Reading
- Bill Gates Says He’s Happier As A Billionaire Than If He Were Middle Class
- Dave Ramsey Says Doctors And Lawyers Are Like Actors, Notoriously Bad With Money