Robotaxis done wrong
Dear stupid Market,
If you weren’t so obsessed and enamored with Tesla robotaxis then you wouldn’t be so blind to the fact that:
They are expensive to make
The are expensive to maintain (new sets of tires every 18 months if you’re lucky, if you’re not (battery issues) then it will cost you an arm and a leg)
They depreciate fast (just like iPhones)
They cost a lot (especially when you add trims)
Tesla Robotaxi (Model 3)
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It’s not just Teslas, in general, AVs are expensive to make for almost all auto makers (except China).
Waymo (Jaguar I-Pace)
Most AVs are luxury cars. They are expensive. Now, imagine using luxury AV cars in a robotaxi fleet where cars are under heavy utilization.
Sooner or later things break:
- Window stops rolling down.
- Wiper get stuck
- Tires are getting worn out super fast (AVs are heavier + daily mileage)
- Luggages accidently scratches the car.
- Seats get worn out fast from constant flow of people getting in and out.
- Shorter battery pack lifespan
Insurance costs:
Insurance is much more expensive for luxury AV cars subjected to heavy utilization.
Depreciation:
EVs that were previously used as AVs depreciate fast. The demographic that wants an EV usually prefers the greatest and latest. Also converting an AVs back to EVs has added costs.
Robotaxi fleet operators will mostly have 2 options:
Try to sell them on the used car market (poor resale value)
Run them until they are worth nothing.
Hertz tried to do it and they failed
In 2021, Hertz purchase 100 000 Teslas, 65 000 Polestars and 175 000 GM EVs. It did not workout for them at all. They usually make back a huge portion of their capex by reselling the vehicles. The problem is that no one wants to buy outdated / used EVs. They depreciate too fast. Starting in 2023, Hertz sold a huge portion of its EV fleet at a loss.
The margins were too thin.
The solution is obvious
Make robotaxis that are:
Less expensive to make
Can survive through a lot of human traffic
Less expensive to maintain (cheap parts)
Cheaper to insure.
So what do you get ?
Zoox
Tesla Robovan
So, we go back to this right ?
City Bus
There’s nothing more durable, more maintainable than a city bus and the economics are proven.
I’m not the only one thinking this. It’s the same conclusion many fleet operators and transit economists have reached.
But we still need taxis like we always have
Toyota Corolla
As a fleet operator, if you want to make money. This is the kind of car that you want: A good ol’ trusty Toyota Corolla.
Using 70 000$ AVs does not make economical sense. The margins are too thin (why chase after thin margins?) A 25 000$ Toyota Corolla Hybrid makes perfect sense and the parts are cheap. If they can retrofit a Jaguar to be AV capable then they can retrofit a trusty reliable and cheap Toyota Corolla Hybrid. It’s a hybrid/gas car ? Just have robot fill it up at the gas station, only takes a few seconds.
Yes, it’s not sexy.
But, I post about making money.
If that’s not your priority then get the fuck out…