Deepwater Asset Management’s managing partner Gene Munster shared his thoughts on the future of autonomous vehicles, discussing their potential advantages and the hurdles they face.
What Happened: Munster shared his four main observations from Elon Musk-led Tesla Inc.’s TSLA “We, Robot” event.
Here are Munster’s key takeaways:
The World Needs Autonomy
According to Munster, vehicles in autonomous fleets could reduce cost per mile by 65-75% due to higher usage, and the time saved from not driving could be worth around $21,000 annually in personal value.
“In the U.S. alone, it could save tens of thousands of lives and hundreds of billions of hours per year.”
However, he said that it is important to note that safety and sustainability impacts still depend on various factors.
It’s Going To Take Longer
The analyst also revised his timeline for autonomous driving, acknowledging it will take longer than he anticipated.
He said that while there’s a 20% chance of a breakthrough akin to a “ChatGPT moment” in the next year, current trends and regulatory challenges suggest Full Self-Driving progress is slower than expected.
“Tesla’s geofenced Robotaxi fleet approach likely signals that unsupervised FSD will take 1-2 years longer than I originally expected.”
Robotaxi Fleet’s Impact On Income
Munster projected that a nationwide Robotaxi fleet could account for 20% of Tesla’s operating income by 2030.
His model assumes, “Tesla will charge $16.50 per ride, offering a 25% discount,” gaining significant market share due to a price-sensitive environment.
He noted that pricing the service 25% lower than competitors in a highly price-sensitive market could lead to substantial market share gains. With a 50% market share by 2030, this could bring in roughly $4.5 billion in operating income.
Unsupervised FSD’s Potential
According to Munster, the greatest opportunity for Tesla lies in unsupervised FSD, which could significantly increase market share, driving more car sales. Licensing FSD to other automakers is also a possibility, which could be a major revenue source for Tesla.
I’ve done more work on the impact of the “We, Robot” and left with two key takeaways. This is going to take longer than most people think, and be bigger than most people expect. $TSLAhttps://t.co/xu0aTuRC1n
— Gene Munster (@munster_gene) October 18, 2024
Why It Matters: Last week, at the “We, Robot” event, Tesla showcased the company’s advancements in autonomous vehicles. The company unveiled its two-seater Cybercab and 20-seater Robovan, both designed for autonomous driving.
The event also featured 1,300 “Perfectly Safe” autonomous trips, driving over 2,000 guests, according to a Tesla executive.
However, the event also sparked controversy over Tesla’s “Optimus” robots.
Several reports indicated that the robots were operated by engineers, leading to criticism over their capabilities. Optimus engineer Milan Kovac later admitted that the robots were ‘human-assisted to some extent’ at the event.
Kovac said that one of the robots toppled over after its hand got tangled in someone’s handbag, suggesting Tesla still has work to do to perfect the robots’ functionality.
However, the company has made notable progress in improving Optimus’ hardware stability and the infrastructure needed to operate the robots in outdoor public settings.
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