Will Tesla Be the First Car Company to Launch a Fleet of Robot Taxis?

David McNew/AFP/Getty Images
David McNew/AFP/Getty Images

Thanks to the taxi industry’s failure to keep up with people’s changing expectations, Uber has been able to grow incredibly quickly over the last few years. The ride-sharing app may be a modern interpretation of what the taxi industry should be like, but at the same time, it still involves paying a person to drive another person from one location to another, something that is both costly and necessary for now.

Advances in automated driving technology promise a future where taxis aren’t actually operated by humans. The taxis themselves would probably be more expensive, but without having to pay a driver, a ride in an autonomous taxis would probably still end up being cheaper than Uber is currently.

The question, though, is which company will be the first to launch an autonomous taxi service. If Morgan Stanley’s analyst Adam Jonas’ most recent prediction is correct, then that company will be Tesla.

As the Detroit Free Press reports, Jonas believes Tesla has enough of a lead on developing electric cars the technology to wirelessly connect them that it will be the first to bring autonomous taxis to market, presumably as a division called something like “Tesla Mobility.”

“We would be surprised if Tesla did not share formalized business plans on shared mobility within the next 12 to 18 months. This could potentially be followed by commercial introduction in 2018,” writes Jonas.

Any launch of this service would have to wait until after the less-expensive Tesla Model 3 begins production though. The Model 3 is supposedly going to cost only $35,000, a goal that will only be attainable by building a factory that’s large enough to significantly bring down the cost of battery production for the company. Building such a large battery production facility would give Tesla a major advantage in the development of other products like autonomous taxis.

“Tesla has been the most outspoken auto company on the use of autonomous technology to improve inefficiencies and safety of today’s road transport,” writes Jonas. “100% of Tesla’s cars are electric, connected, and able to ‘learn’ through over-the-air firmware updates at any time. No other established automaker can claim this today.”

Kevork Djansezian/Getty Images
Kevork Djansezian/Getty Images

In fact, Jonas is so confident that the autonomous taxi service will put Tesla far ahead of its competition, he’s upping his price target from $280 per share to a much-higher $465 per share. A target that high might sound outlandish, but he says it’s more conservative of an estimate than you might think. Supposedly, some even-more-confident analysts have the price pegged as high as $611 per share.

Those are certainly extremely large numbers, but at the same time, successfully introducing a vehicle service like “Tesla Mobility” has the potential to completely change the way people get around in most urban and even suburban environments. For very little money per ride, people could use a car only when they need it and without having to worry about problems like vehicle range or maintenance.

None of this has been officially confirmed, of course. Then again, Musk may have inadvertently shown his cards during a call with investors when Jonas asked whether Tesla would be interested in supplying electric vehicles to ride-sharing services or simply cutting out the middleman.

Musk reportedly responded by pausing for a full six seconds, then told Jonas his question was an insightful one. Jonas didn’t press the issue, and Musk eventually answered that he didn’t think he should answer that question.

Musk’s awkward, drawn-out response to Jonas’ question made it pretty obvious that the question hit close to a truth. Some have wondered whether or not Musk meant he’d be partnering with Uber, but clearly Jonas interpreted it as the opposite – that Musk intends to launch his own ride-sharing service.

Whether it happens or not is still entirely up in the air. Analysts are a lot like the weathermen of the automotive industry. They can study trends and make predictions, but it’s still impossible to predict the future. There’s a lot that could still go wrong between now and Tesla gaining total transportation domination, but hey, Musk can dream, can’t he?

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