Tesla CEO Reiterates Plan To Take On Uber, Lyft With Its Own Autonomous Ridesharing Service

Tesla CEO Elon Musk plans to take on Uber and Lyft with its upcoming ride-sharing platform dubbed the “Tesla Network” and its own fleet of autonomous vehicles. (JOHANNES EISELE/AFP/Getty Images)

During its third-quarter financial results earnings call yesterday, Tesla CEO Elon Musk outlined how the carmaker plans to take on Uber and Lyft with its upcoming ride-sharing platform dubbed the “Tesla Network” which was first mentioned in July 2016, as part of Musk’s Master Plan, Part Deux vision.

Below was Musk’s original vision he shared 2 years ago:

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.

Tesla’s ride-sharing service will operate its own fleet of autonomous vehicles

And yesterday, Musk double-downed on his vision of a “shared electric autonomy” where Tesla will operate its own fleet of autonomous vehicles in addition to letting customers offer their car to the fleet at will.

“There will be Tesla dedicated cars for ride-hailing [the Tesla Network] and any customer will be able to share their car at will, just like you share your house in Airbnb,” Musk said. “So it’s a combination of those 2 models [Uber and Airbnb]. I think it’s pretty obvious where things are headed long-term.”

However, for Musk, Tesla’s main advantage over the competition (Uber, Lyft, Didi) is that it “will have millions of cars in the field with full autonomy capability, and no one else will have that,” putting the car maker “in the strongest competitive position long-term.”

Atherton Research’s Take

It will probably take about 5 years for Musk’s vision to turn into reality, which is a curse and a blessing for ride-sharing services like Uber or Lyft, and their investors, as they prepare to go IPO next year.

Although all the Tesla vehicles built in the past 2 years have already all the necessary sensors to support the carmaker’s full self-driving system which is required for the Tesla Network to work, one major piece is still missing: Tesla’s new Autopilot computer dubbed “Hardware 3” that is expected to ship by the end of March and will bring a 1,000% increase in processing capability compared to the current hardware, while costing the same.

And when that’s complete, it’ll be game over for Uber and Lyft.

 

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Tesla CEO Elon Musk plans to take on Uber and Lyft with its upcoming ride-sharing platform dubbed the “Tesla Network” and its own fleet of autonomous vehicles. (JOHANNES EISELE/AFP/Getty Images)

During its third-quarter financial results earnings call yesterday, Tesla CEO Elon Musk outlined how the carmaker plans to take on Uber and Lyft with its upcoming ride-sharing platform dubbed the “Tesla Network” which was first mentioned in July 2016, as part of Musk’s Master Plan, Part Deux vision.

Below was Musk’s original vision he shared 2 years ago:

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.

Tesla’s ride-sharing service will operate its own fleet of autonomous vehicles

And yesterday, Musk double-downed on his vision of a “shared electric autonomy” where Tesla will operate its own fleet of autonomous vehicles in addition to letting customers offer their car to the fleet at will.

“There will be Tesla dedicated cars for ride-hailing [the Tesla Network] and any customer will be able to share their car at will, just like you share your house in Airbnb,” Musk said. “So it’s a combination of those 2 models [Uber and Airbnb]. I think it’s pretty obvious where things are headed long-term.”

However, for Musk, Tesla’s main advantage over the competition (Uber, Lyft, Didi) is that it “will have millions of cars in the field with full autonomy capability, and no one else will have that,” putting the car maker “in the strongest competitive position long-term.”

Atherton Research’s Take

It will probably take about 5 years for Musk’s vision to turn into reality, which is a curse and a blessing for ride-sharing services like Uber or Lyft, and their investors, as they prepare to go IPO next year.

Although all the Tesla vehicles built in the past 2 years have already all the necessary sensors to support the carmaker’s full self-driving system which is required for the Tesla Network to work, one major piece is still missing: Tesla’s new Autopilot computer dubbed “Hardware 3” that is expected to ship by the end of March and will bring a 1,000% increase in processing capability compared to the current hardware, while costing the same.

And when that’s complete, it’ll be game over for Uber and Lyft.

 

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