Digesting Elon Musk’s Full Self Driving (Robotaxi) Tweetstorm

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July 16th, Elon Musk tweetstorm number: (ERROR system overload).

Tesla CEO Elon Musk today tweeted several times regarding Autopilot and Full Self Driving (FSD). As we had heard before, once FSD is successfully implemented and Tesla can start operating robotaxis, the price of Tesla cars will increase significantly. We recently analyzed that information to put it into some potential future context, since it is not immediately clear how this practically fits into Tesla’s grand production and sales scheme. But a short TL;DR (too long; didn’t read) is as follows:

In about 3–6 years from now, Tesla could start releasing a robotaxi-tailored model, one without a steering wheel and to be sold at a higher price than the cars on the market today. This is something we at CleanTechnica are calling “Tesla Model Omega.”

Tesla hasn’t announced such a plan, but we’re getting more details on what Elon expects to change in coming years as FSD is implemented.

If we make all cars with FSD package self-driving, as planned, any such Tesla should be worth $100k to $200k, as utility increases from ~12 hours/week to ~60 hours/week

— Elon Musk (@elonmusk) July 16, 2019

As you can see, there is still plenty of skepticism around autonomy and Elon’s claim that Teslas bought today will likely be appreciating assets. The important thing is, if Tesla vehicles suddenly become capable of robotaxi service with a software update, the value of a used (or new) Tesla should suddenly rise, even above 2018 or 2019 purchase prices.

What the tweet above reveals is that Elon believes Tesla cars to be worth between $100,000 and $200,000 once FSD is activated. Although, why Elon chose “~12 hours/week to ~60 hours/week” remains a bit of a mystery. While the 12 hour figure would equal just slightly under 2 hours a day and represents the daily commute of most people, the 60 hour figure would equal about 8 and a half hours per day, which is almost equal to a 9-to-5 job but would mean the car doesn’t drive in the evening and/or doesn’t drive on the weekends. 60 hours a week means the car stands idle quite a bit.

The assumptions here have major implications. Most importantly, perhaps, it determines how much a robotaxi will be worth. (People won’t want to pay more than they expect to make on the car.) Further, it raises the question, how many robotaxis does the world ultimately need?

No, since Tesla will charge a % fee for being in our robotaxi fleet, but it will rise to whatever the clearing price is, otherwise all our cars will be bought by scalpers

— Elon Musk (@elonmusk) July 16, 2019

This tweet above was quite puzzling and caused some controversy between CleanTechnica staff. However, after careful consideration, the team came to the following conclusion. (Note that sticker price is “the advertised retail price of a car.”) Elon Musk doesn’t have a specific price point in mind that Tesla robotaxis will be sold for, but the company will continue to be responsive to the market, and to avoid scalpers buying up all of Tesla’s cars and reselling them for more money without serving any real service to society, Tesla will raise prices as the market shows a need for it. (Tesla can then pump those greater profits into faster growth, presumably.)

Straw man fallacy. To appreciate, your car just needs to be worth more than you paid for it, so probably ~$75k is enough if you bought a 3. FSD will be bundled in all cars (important point). Something is not a commodity if you can’t make enough of them & we won’t be able to.

— Elon Musk (@elonmusk) July 16, 2019

From all communications up till now, it seems the Model 3 will remain on the market long after FSD is activated and Tesla launches a robotaxi network. Nonetheless, it is logical that something like the “Model Omega” is inevitable and is just a matter of time.

Cost of Tesla full self-driving option increasing by ~$1000 on August 16

— Elon Musk (@elonmusk) July 16, 2019

Agreed. That’s approximately date when we expect Enhanced Summon to be in wide release. It will be magical. Lot of hard work by Autopilot team.

— Elon Musk (@elonmusk) July 16, 2019

This entire discussion has also led Elon to reveal that the price of the FSD package will increase by ~$1000 in one month Elon justified the price increase by claiming that new features are going to be released around that date. What that update will include other than the wide release of “Enhanced Summon” is currently unknown, but considering the timing, the fact that Elon said in-browser viewing of videos from platforms like YouTube and Netflix are around the corner and he much earlier also said that these features would come with V10 software, this might be coming within a month. Although, there is currently no direct evidence of this. Tesla Early Access Program drivers are certainly not reporting any unusual new features other than “Enhanced Summon.”

In any case, all of this information will quite likely fuel multiple analyses further scrutinizing how these new numbers affect the grand scheme of things. For that, please make sure to check back with us again later this week!