Tesla Network Promises One Million Robotaxis on the Road by 2020

"The fleet wakes up with an over-the-air update. That's all it takes," Tesla CEO Elon Musk said.

via Tesla

On Monday, Tesla held its first-ever Autonomy Investor Day where the automaker discussed the future of its "Full Self-Driving" Autopilot suite, with CEO Elon Musk swearing that drivers would no longer need to pay attention to the road by the end of 2020. Loaded tech debate aside, Musk also used the event to showcase how the promised land of Level 5 autonomy could open up a whole new side of Tesla's business: Robotaxis.

One of Teala's goals since Autopilot v2 was announced in October 2016 has been to assemble a fleet of privately owned autonomous ride-sharing vehicles on an exclusive service called the Tesla Network. The hybrid Uber-and-Turo combo service would allow Tesla owners to enroll their car at-will to provide ride sharing services autonomously with no driver behind the wheel. Tesla would take a 25 to 30 percent cut of the revenue and pass on the rest of the earnings to the owner. Theoretically, you could drive your car to work, then send it out for its own full workday.

via Tesla

The company has also begun to stock its own fleet of vehicles for the service to deploy in areas where there simply aren't enough owners to service anticipated demand for the platform. In fact, it's openly stated that customers who lease Model 3s will not be able to buy them from Tesla once their lease has ended, likely so Tesla can capitalize on the depreciation of the vehicle and add it to its fleet at a reduced cost.

Tesla is effectively looking to expand its offerings from just making cars to also providing mobility services. Tesla expects a single Model 3 to rake in $330,000 in gross profits over its lifetime of 11 years. A baker's decade might seem like a long service life for a full-time taxi, and it absolutely is. But the company claims it can pull it off because its vehicles are engineered to withstand 1 million miles of operation. The weak point is the battery, which in the Tesla Model 3 is only designed to last between 300,000 and 500,000 miles. Musk says that a new 1-million-mile pack will enter production in 2020.

via Tesla

While this service might seem like a far away concept, Musk assures investors that Tesla expects the service to launch by the end of 2020 barring regulatory difficulties. Musk also claims that by 2022, Tesla will build a car with no steering wheel once Washington (and the rest of the country) is comfortable with the idea of a Tesla operating fully autonomously.

"Next year for sure, we will have over a million robotaxis on the road," said Musk, "The fleet wakes up with an over-the-air update. That's all it takes."

Similar efforts by companies like Waymo are presently limited by geofencing their operations in approved testing areas. There are questions beyond the self-driving technology itself, too; things like charging infrastructure must be addressed. How would a car juice up without a driver? Tesla had previously shown off an automated prototype which would charge a vehicle sans-human, though Musk did not address any information regarding a production version during the presentation. And what about maintenance: Given Tesla's long history of even longer repair times, how much downtime will these robotaxis endure?

The questions surrounding safety are legion. What's the failsafe when the car gets confused? Can riders take control from the back seat, or without a steering wheel? And who would be responsible for a Tesla Network vehicle that causes property damage or harm? Musk's short answer: "probably Tesla".

Despite the concerns, Musk is playing rolling the dice to help keep the company afloat by diversifying its offerings, which in today's day and age includes becoming a "mobility services" provider. In fact, the economic projections form a key pillar of his recent arguments that a Tesla can be an appreciating asset, earning money for its owners over time. "It is financially insane to buy anything other than a Tesla," he said.