Tesla held a major event on Monday to make one thing clear: It’s going all in on self-driving cars.
During the nearly three-hour presentation, Tesla CEO Elon Musk and his fellow executives dissected the technology that powers Tesla’s self-driving car technology. They predicted when fully self-driving cars will take the road, explained why Tesla can upend the ride-hailing market, and how driving itself could change dramatically in the next few years.
The comments came against the backdrop of growing questions about Tesla’s ability to achieve its production goals and turn its money-hemorrhaging into a money maker. They also serve as a big test for Musk, who is known for setting ambitious goals and then failing to meet them.
Investors were clearly skeptical. Shares in the company dropped 3.9% to $262.75.
Needless to say, Tesla’s Autonomy Day presentation was jam-packed with news. Here are the three biggest takeaways.
Tesla Cars Are Ready to Be Autonomous
Musk said that “all Teslas being produced right now” already have the technology that would allow them to drive without human intervention. All it would take is a software update to turn on the feature, called Navigate on Autopilot.
Musk stopped short of saying how many Tesla cars currently have the still-untapped self-driving car technology. But he told attendees that by the mid-2020, he expects more than 1 million Tesla vehicles to have its autonomous driving technology ready when the feature is turned on at some point in 2020.
Tesla to Go After Uber With Robotaxis
Within the next year or so, Tesla plans to jump into the ride-hailing market to compete with Uber and Lyft. Musk said that the service would let users hail a Tesla for a ride from one destination to another—similar to Uber and Lyft. However, Tesla’s robotaxis won’t have drivers, Musk said. And in some cases, the cars would be loaned by current Tesla owners.
Part of the program will depend on Tesla-owned cars deployed in larger U.S. cities, Musk said. Those cars, entirely by Tesla’s self-driving car technology, would be hailed from the Tesla app. Pricing for the rides hasn’t been announced.
The program’s other strategy is to enlist existing Tesla owners to add their vehicles to Tesla’s network of ride-hailing cars. Passengers who request a ride would be picked up by the loaner’s car, without a driver, and then be shuttled to their destination using the same self-driving technology.
Musk said that the service will operate similarly to Apple’s App Store, in which Apple, in some cases, takes a 30% cut of the revenue. Musk said Tesla will similarly take a 30% commission, leaving the remaining 70% to Tesla owners.
Musk predicted that the average robotaxi will make $30,000 in gross profit per car, annually for owners and Tesla combined. Owners, therefore, could make $21,000 annually loaning out their cars for ride hailing. He didn’t specify whether that figure assumes full-time or part-time loaning.
Plenty to Look Forward To
Musk also said Tesla would unveil an as-yet named pickup truck later this year. He also anticipates producing 10,000 Model S, Model 3, and Model X vehicles combined per week sometime this year. Last year, Tesla was producing 7,000 cars per week by the end of year, according to CNBC. That was in line with analyst expectations.
Looking ahead, Musk said that his company’s robotaxis should start hitting the road sometime in 2020, pending regulatory approval. He also said that Tesla would produce its Model Y crossover vehicle and Semi truck, both electric vehicles, next year.
Within two years, Musk said, Tesla would “probably” stop producing cars with steering wheels or pedals—a nod to the company’s belief that self-driving cars will be the most desired vehicle type by then. Some experts, however, believe self-driving cars won’t be ubiquitous for up to a decade from now.