Bank Warns That Robotaxi Companies May Have Overlooked Severe Obstacles to Actually Making Money
They're not convinced.
Cost Benefit
As Elon Musk's Tesla triples down on an autonomous ridehailing service, analysts are ringing the alarm bells, warning that even if the technology were swiftly perfected, it could take many years for robotaxis to become profitable.
As Business Insider reports, analysts at HSBC warn that the market for driverless taxis — if there even is one — is being "widely overestimated."
In a note published on Monday, they posited that driverless cabs involve a whole host of "overlooked" costs that could severely cut into already razor-thin margins, including parking, charging, cleaning fees, and human remote operators, who are tasked with taking over when needed.
"When we factor in these costs, we believe robotaxis won't be break-even on a cash flow basis until 7-8 years after launch," the note reads, as quoted by BI.
It's a notable vote of no confidence, undercutting Musk's promises of establishing a fleet of "millions" of autonomous Teslas by the end of next year, efforts that would allegedly add tens of trillions of dollars to Tesla's market cap.
Exaggeration Station
Even without factoring in additional costs, Musk's EV maker has struggled to realize self-driving. The mercurial CEO has infamously promised that Teslas will drive themselves "next year" — every year since 2014.
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