Cybercab 24-hour countdown

1.

At 10 a.m. Beijing time tomorrow, Tesla will hold a product launch event called "We, Robot" for its robotaxi/Cybercab at Warner Bros. Studios in Los Angeles.

According to Elon, this will be an event that will be "recorded in history".

In the early hours of today, the official Tesla account posted to hype up the event: "If you don't have to drive, how would you use this time?"

The Cybertruck official account playfully responded: "But I like driving."

2.

On October 5th, Cathy Wood, founder and CEO of Ark Investment Management, a staunch supporter of Tesla and Elon, was interviewed by Yahoo Finance.

Cathy Wood predicted that for Tesla, the robotaxi business will be a "four to five trillion dollar revenue opportunity in the next five to ten years. This is a SaaS model with a gross margin of over 80%."

Host:

We have discussed this many times. Your investment time span is three to five years, and your biggest investment is Tesla, which has not performed well this year.

Cathy, how do you view these things now?

Cathy:

Believe it or not, I will tell you that Tesla has given us great comfort because we have done in-depth research.

I think many analysts have not researched autonomous driving cars like we have. Our investment time span is longer, which is why we conduct research.

With the arrival of robotaxi day, next week on October 10th, I believe more and more people, more and more analysts, will have to start modeling for this.

Once they do that, they will come to this conclusion: this is a SaaS model with a gross margin of over 80%. While the gross margin for electric vehicles is 15% to 30%.

They will have to raise their expectations.

Host:

Cathy, can I ask you a question?

There are also other people who have done this work and come to conclusions similar to yours. I'm just not sure, on robotaxi day, what exactly we will learn, and from your internal communication with Tesla and investigation of the company, what will we hear on October 10th?

What is the timeline for all of this to materialize?

Cathy:

I think they will fill in some of the blanks about when and how robotaxi will be launched. This will become very important. They will make it more realI believe that analysts may take Elon's words more seriously this time. Because in the past five years, he has been predicting the achievement of autonomous driving within the next two years. I have to say, last year we were already anticipating the realization of autonomous driving.

But Waymo is already in operation now, and more and more people are trying it out. For Tesla, it's not a question of "will it happen", but "when will it happen".

For Tesla, the question is how quickly they can roll it out. They will strive to achieve their expectations at a fast pace, nationally and even globally.

I think, as you all know, Elon's mindset is very bold, and he is leading Tesla to win the majority of the market share in this market.

This AI project is a "winner takes most" project.

Which company can get people from point A to point B the fastest and safest, while minimizing wait times as much as possible, will win the majority of the market share.

I think, when people see Tesla's strategy, coupled with the fact that "wait, Waymo is already doing this", it is definitely possible. We no longer need to worry about this issue.

How big is this market?

Well, we have already published our model, on our website, ARK-INVEST.COM. We have also posted it on GitHub. If you disagree with our optimistic view, you can adjust the variables and see how big this market could be.

From a revenue perspective, this is a huge opportunity. Among the companies operating this network, Tesla will be one of them.

If our research is correct, in the next five to ten years, this will be a revenue opportunity of four to five trillion US dollars.

Again, winner takes most.

In the next five years, for Tesla, this is a trillion-dollar revenue opportunity. It's a great idea.

3.

On the 8th, Tasha Keeney, the investment analysis director of Ark Invest, released a research report titled "Countdown to Cybercab - Tesla's Trillion-Dollar Robotaxi Opportunity". The full text is translated by Lao Wa below.

At 10 a.m. on October 11th Beijing time, Tesla will release its highly anticipated robotaxi Cybercab, taking a crucial step towards launching autonomous travel services. We believe that the autonomous taxi platform will open up a market worth trillions of dollars and begin to dominate Tesla's valuation, approaching 90% of its enterprise value in the next five years.[1]

How will Tesla's robotaxi service operate?

As described in the following text, by updating the Full Self-Driving (FSD) software online, Tesla expects to achieve full autonomous driving in the United States next year.[2] Once the FSD update goes live, ARK expects Tesla to launch robotaxi services in the next one to two yearsEven before achieving fully autonomous driving, Tesla may launch a human-driven travel service that will collect valuable data on routes, customer behavior, and operational dynamics, while also providing information for its service infrastructure and building a customer base.

When will Tesla achieve fully autonomous driving?

Tesla's prediction:

"...based on current trends, it seems like we should be able to achieve a high enough intervention interval mileage by the end of this year, far exceeding humans, to the point where unsupervised autonomous driving can be done. If we can't do it next year, I would be very surprised."

—Elon Musk, July 23, 24 [3]

Ark Investment's prediction (probability of Tesla robotaxi commercialization in the first year)

Note: Due to rounding, the sum of the numbers may not equal 100%. Data source: ARK Investment Management LLC, 2024. This research report draws on a series of external data sources, data as of June 12, 24, available upon request. The forecast itself has limitations and should not be relied upon. For reference only.

Importantly, the low-cost production of Cybercab should not become a bottleneck for Tesla to launch robotaxi services. Tesla's fully autonomous driving solution should be compatible with vehicles equipped with HW3 and HW4 hardware—there are approximately 6.5 million globally, with around 2.5 million in the United States.

[4] To launch this service, Tesla can deploy a fleet consisting of existing Model 3 and Model Y vehicles, including those that are about to end their leases and vehicles in inventory, [5] at the same time, customers choosing to add their vehicles to the robotaxi service [6] can supplement the fleet. In the long run, most of Tesla's robotaxi fleet vehicles may be owned and operated by third-party partners, with Tesla hosting the ride-hailing platform itself and possibly retaining a small number of its own vehicles.

Tesla's ability to rapidly expand its fleet size should not be underestimated. In comparison, Waymo currently operates robotaxi services in Los Angeles, San Francisco, Phoenix, and Austin. According to recent reports, its fleet size is around 700 vehicles [7], with longer wait times than Uber. [8] In fact, Waymo's partnership with Uber in Phoenix, Austin, and Atlanta may be due to the challenges of scaling up. [9] Like Waymo, Tesla may also launch robotaxi services city by city; but unlike Waymo, Tesla should be able to scale faster because it does not rely on high-definition maps or geographical barriers. However, Tesla's most important advantage over Waymo may lie in its data lake of real-world driving miles.

According to research by Ark Invest, Tesla's customer vehicles drive over 8 million kilometers per day under FSD, and if non-FSD mileage within the U.S. is included, the daily mileage exceeds 140 million kilometers, providing valuable video clips for Tesla to train its autonomous driving software. [10] Ark Invest estimates that Waymo's fleet drives about 110,000 kilometers per day, as shown in the figure below [11].

Note: FSD still requires driver attention, while Waymo does not have drivers in the data above. Source: ARK Investment Management LLC, 2024. This research report draws on a range of external data sources, data as of September 27, 25, available upon request. For reference only

The scale of Waymo's fleet and the limited driving conditions in the few cities it operates in likely restrict its exposure to real-world "edge cases". In contrast, Tesla's fleet has been collecting various camera data from all over the U.S.

Furthermore, thanks to its vertically integrated production method, Tesla has a clear path to expanding its robotaxi fleet scale, while Waymo must rely on ZEEKR. ZEEKR is located in China and may face high U.S. tariffs, [12] which may also be a reason for Waymo to establish another production partnership with Hyundai.

[13] Ark Invest estimates that Waymo's vehicle production cost exceeds $100,000, with sensors alone costing over $40,000, [14] but it is working to reduce costs. [15] The cost of Tesla's Model 3, including sensors, is $40,000. [16] Although Tesla needs to establish backend support for remote vehicle assistance and customer support, it should be able to effectively scale using existing factories, charging, and service infrastructure.

Compared to the technical challenges of achieving fully autonomous driving, the obstacles brought by regulatory approvals should be fewer. Competitors Waymo and Cruise have already paved the way in terms of regulations. [17] In the U.S., 40 states have either explicitly approved or not prohibited autonomous vehicles. [18]

Additionally, Tesla's vast database also helps prove its safety advantage to regulatory agencies. Ark Invest estimates that autonomous vehicles can reduce accident rates by over 80%. Last year, Tesla's data has already shown that the accident safety of vehicles equipped with FSD is five times that of vehicles without FSD when driving on city roadsThe safety of Waymo's vehicles is about twice the national average, with a reduction of over 70% in injury accidents. As the utilization rate increases, the price of autonomous driving travel services may be lower than human-driven travel services. Currently, the revenue utilization rate of New York City taxis is about 30%-40%, meaning the percentage of time with passengers in the car within any given 24 hours. The utilization rate of autonomous vehicles may exceed 50%, ultimately reducing the average cost per kilometer. Over time, lower prices should stimulate demand and expand the market.

It is worth noting that even without full autonomous driving, Tesla's human-driven travel services can reduce current travel costs, as the operating cost of electric vehicles is approximately one-third that of gasoline vehicles.

The $11 trillion is the potential overall market, not our projected revenue for 2030, as we expect autonomous driving vehicles will not penetrate all potential overall mileage. Source: ARK Investment Management LLC, 2024. This research report is based on a series of external data sources and is available upon request. Forecasts themselves are limited and should not be relied upon. For reference only, and should not be considered as investment advice or a recommendation to buy, sell, or hold any specific securities.

Due to its lower cost structure and the price protection umbrella provided by traditional travel services, we believe Tesla can demand a commission rate more than 30% higher than Uber's. According to our research, as autonomous driving technology reduces costs and expands the market, the net revenue scale of the robotaxi platform will reach approximately $40 trillion in 2030.

Tesla's target total addressable market (TAM) is much larger than Uber's vision, and it is also completing the largest AI project on Earth, a project that can save over 40,000 lives in the United States and approximately 1.2 million lives globally each year.

Note: "EBIT" refers to Earnings Before Interest and Taxes. Enterprise Value (EV) traditionally measures the total value of a company. Its calculation includes not only the market value of the company but also short-term and long-term debts, as well as any cash or cash equivalents on the company's balance sheet. When valuing a company, it is often used as a more comprehensive alternative to market value. Source: ARK Investment Management LLC, 2024. This research report draws on a series of external data sources, with data as of January 31, 2024, available upon request._

The original title "Cybercab24 24-Hour Countdown"