Tesla Robotaxi | This Changes Everything.

He just had to intervene.

>> Yeah.

>> Said stop in lane.

>> Oh man, did we just break a road taxi?

And what did we find out? Well, in this

video, I'm going to first of all shout

out Ellie in space. Thank you so much

for inviting me to Austin, Texas. I was

in Texas for a house hack project and

popped over to Austin from Dallas to

check out Robo Taxi. All thanks to

Ellien Space. So, shout out to her. Of

course, the Tesla team for actually

creating robo taxis. That said, we got

to talk about what happened on this

drive and what went right, what went

wrong, and then of course we get to talk

about the valuation of robo taxi. What

do we think this means for the stock?

Because that's what we care about. So,

first things first, meet Ellie.

>> Hey everyone, me Kevin here. I am in

Austin, Texas, and we're here with Ellie

in space. What's up? Hey, welcome.

>> Thank you. Thank you so much. We are

going to get into a robo taxi. Yes.

>> And that's what we do. We book a robo

taxi.

Anyway, so um you know, you can pick

basically anywhere in this area or you

can pick some of their pre uh you know

determined destinations. So book rides

$65.

>> Oh, the price went up. Okay.

>> Yep. And um

>> inflation ter

>> and uh Yep. And so if the car gets here,

it'll wait 15 minutes for us. So

>> Oh, that's actually like much longer

than the five minutes. Usually I get

>> ordering the ride was just like ordering

an Uber. Unfortunately, when it came to

finding the pickup, that was when things

got a little funky. Now, this could be

because Austin has a lot of run single

directional roads, so one-way roads, but

this is something that Tesla should be

aware of. And I do think the vehicle

should have taken a more convenient

pickup route choice, especially since we

pinned at the valet or a hotel, which is

a pretty common destination. That said,

let's get into the car. Let's see. What

does it say?

>> Please enter the vehicle. So, it must be

here.

>> Okay. Some

>> It is uh around the corner.

>> Is it this corner? Uh, Boba Steakhouse.

>> Oh, Bob.

>> Oh, Bob's steakhouse. That'll work. Boba

Bob, you know. Hey, a boba and steak.

That sounds kind of good, actually. I

don't know. Never had the combo before.

So, all right. So, we did request to do

the W, right?

>> We did.

>> All right.

>> So, I mean, I guess the building sort of

wraps around, but All right.

>> Yeah.

>> Um Oh, there he is all the way over

there at Bob's Steakhouse. Okay. Oh,

>> all right.

>> You know, I I'll get some steps in. You

know, I haven't gone on the treddy yet

today. So,

>> I'll let you in first then. There you

go.

>> My challenge.

>> Robo taxi. That's cool. All right.

>> So, close all doors. Fasten seat belts.

>> Does Does it know if I'm going to like

fasten or not? Let's

>> Yes, I think it does, actually.

>> Okay. You can try not to,

>> but I don't think it'll go.

>> Oh, wow. That was fast. That's intense.

Cuz I I just hovered it there for a

moment.

>> So, I will let you choose which one you

want to touch.

>> Um, I want to see the latency.

>> That's pretty good. I That's That's

impressive.

>> All right.

>> And so, this will be interesting cuz

this was the one where it couldn't take

me last time.

>> Okay.

>> So,

>> well, I guess we'll see what happens.

Yeah.

>> Arrives.

So, how hard is it just for giggles if

we're like, you know what? We changed

our mind. We want to go somewhere else.

>> By the way, I don't know what this is.

>> Oh, look at this. Enter a destination.

>> What?

>> Okay. All right. So, let's try

>> Oh,

>> let's try this. That takes us back this

way.

>> Oh, and that would be right on the edge.

>> Okay. All right. So, let's see what

happens. Okay. All right. Uh,

calculating.

>> Okay.

>> Okay. Well, you just taught me something

new. I not Okay. So, there's And then

let's see how, you know, what the car

does because obviously at this point

we've got to flip a UI here or or it

looks like it's going to make a right

turn up here. But that's interesting

because Yeah. So, this little um golden

text, just tap that and then you can

pick whatever location you want. for

much of this ride, most of which I

filmed with my iPhone and then of course

with the #notsponsored meta glasses.

Hate them for the AI. Love them for the

video and the pictures, the convenience

of them. But anyway, for most of the

ride, I things actually seemed pretty

chill. This seemed and felt like a car

that was on some form of enhanced

version of hardware 4. probably

something like a hardware 4 asterisk or

a hardware 4 o see the open AI borrow

there or a hardware 5. Anyway, point is,

it seemed very much like the comfortable

FSD that I feel like now I've grown up

with. From first using autopilot in 2017

in a Model X to getting to FSD on the

various different Teslas and seeing it

evolve and grow over time to going to

endto-end neural nets and then now being

in a robo taxi with, yes, a safety

driver. This felt very casual and

frankly up until now the safety driver

had to do nothing. And this is when we

decided, well, let's try to give this

app a little run for its money. And we

changed destinations, which I then

proceeded to do over and over and over

again. Right before my last change of

destination,

we ended up hitting a little bit of a

snag. And this is where we made a big

discovery about robo taxi.

>> Oh, this is perfect entertainment.

Oh,

>> there was just a shooting a few days

ago. Actually,

>> read national news.

>> Really? What got shot?

>> Um, a four-year-old granddaughter, a

grandpa, and a Target employee.

>> Oh my gosh.

>> Very sad.

>> That is all right. So, this is going to

be interesting. Yeah,

>> cuz I feel like

>> probably strategically a Uturn here

would be best.

>> Uh, I think it's trying to follow this

lead car. Yeah, it's following the car

into the parking structure. Stop in.

What does it stop?

>> He just had to intervene.

>> Yeah, it

>> said stop in lane.

>> It was going to follow the other car.

So, it still has the bias of a follow

car. That's interesting. Yeah.

>> How's your robot taxi?

>> Hello.

>> Your vehicles making uh or having

troubles making progress on it?

Um, I we just tried to route to Ziki and

it seems to be uh confused.

>> All right. Yeah, it looks like they have

a police blockade right there.

>> Uh-huh.

>> Correct.

>> Let's put you

>> Oh, he's moving

>> it. Uh,

>> maybe not.

>> He just Yeah, it's still blockade. Still

a blockade.

>> Although he is sort of moving the car. I

don't know exactly what's going on.

We have accomplished the drama.

I

>> feel like I always get Tesla support on

the line. What is going on?

>> It's you.

>> It literally is.

>> I'm like, jeez. And then these people,

we got

>> They're giving us the looks like,

"What's your problem?"

>> At least they can get through. They're

fine.

>> Yeah, they're fine. They're totally

fine. They don't have to give us the

angry look. Yeah.

>> The whale that picked me up parked

behind a car that was parked at

McDonald's. Just parked right behind it.

And I was like, that's kind of a dick

move.

>> Yeah.

>> Okay. So, so now

>> connected to support

>> remotely trying to figure out what do we

do?

>> Yeah.

>> So, that tends to

>> a U-turn.

>> Well, we're in a three-point turn.

That's

>> Yeah, right.

>> Back it up.

>> Go in. I wonder what this is about. The

blockade.

>> Gunshots.

>> Our Austin serial killer that doesn't

exist.

>> I don't know if we've heard about that

lore. Okay, so here we go. Okay. All

right. That sounds fancy.

>> Good to support.

>> And now this guy.

>> Oh my god, there's a bus behind us.

>> Oh, wow. It's even doing it.

>> I would suspect this is tea operated at

this point. That bing bing.

>> Yeah,

>> I that's my guess, which is fine.

>> Um and this is this is a definitely an

edge case.

>> Yeah,

>> but that follow car I think was

something to observe.

>> Yeah.

Well, and I wonder Okay,

that's the funny thing is like,

>> go ahead, pull me over.

>> Yeah, please. I I'd love to get pulled

over in a robo taxi.

>> Welcome to Austin.

See, the longer you stay in the car,

there's bound to be a little bit of

drama.

>> Yeah, just keep rening.

>> But, I mean, okay, it kept us safe.

>> It did. They did have to intervene.

>> That's okay.

>> But you know like this is not rolled out

as as Whimo is right now. So it's like

these are important things to point out.

>> Yeah. So it seems like the same bias

that we actually have in our FSD

versions of preferring a follow car or

in other words preferencing or biasing

to follow another vehicle assuming the

other vehicle is going to be a tool to

help get you out of a sticky situation

is the same bias that exists here in

FSD. Now, usually this isn't a problem

because cars generally just follow the

navigation path, but in this case, we

did have a situation where the robo taxi

wanted to follow another car into a

parking structure, which was the wrong

decision in this case. So, I don't know

if there's a waiting towards bias

towards a follow car. If you get in a

sticky situation, there probably should

be a different bias because in this

case, we got stuck with tech support.

Now, I have to say getting stuck with

tech support was actually kind of cool

because it seemed like we heard this

sort of chime of FSD turning on for a

teleoperator, uh, which I'm presuming

was a teleoperator since our safety

driver manually paused the ride. Uh, and

then the vehicle proceeded to make a

very cautious sort of three-ish point

turn to U-turn out of there, which is

exactly what you would expect a tele

operator to do because that's what a

human would do. Okay, roads blocked,

threepoint turn or U-turn and get out of

here. So, this was very normal and very

natural. Now, what does this mean for

Robo Taxi in general? And how did the

rest of the ride go? Perfectly. Frankly,

the ride itself was amazing. I didn't

have to deal with an Uber driver trying

to talk to me. I didn't have to deal

with an Uber driver chewing popcorn

loudly.

I had that like at the same day that I

was in Austin. It was the most miserable

experience because I wasn't sure how to

politely tell them like not to eat cuz

it's their car, but then also like could

you chew less loudly, but then is that

rude? Should I just suck it up for the

next minute or 10, you know, 10-minute

ride or whatever it was? It It was a

painful situation for me. I don't know.

Those those were some pretty loud

munching sounds and and you know, not

not my favorite. Anyway, I'll put that

behind me. But let's understand this is

a car that essentially outside of a

police blockade, which was a total

fluke, performed really well. I felt

comfortable in the car. I didn't have to

talk to anyone other than the person

that I wanted to talk to, which was the

passenger I was riding with. I didn't

have to engage with uh anyone for, hey,

I'm going to change the destination. I

could do it all through the app. I could

control the climate the way I wanted it.

Everything is essentially functional.

Well, with the exception of the internet

access, which wasn't working, so we

couldn't really stream YouTube or get

up. But that's okay. We get enough of

that anyway. uh and so really very

pleasant experience with robo taxi

overall. Now the risk factor that we run

into with robo taxing is obviously that

these sort of edge case scenarios become

commonplace because if edge case

scenarios become commonplace then what

happens is you end up with the

perception that this is a novel

technology but it is a risky technology

that if there's some edge case scenario

you're going to end up getting delayed

you're going to miss your Pilates class.

you're going to miss your appointment,

you're going to miss your work meeting,

whatever. That is a real risk to the

future of robo taxi. Also, another risk

would be the delayed removal of the robo

taxi safety driver because frankly the

safety driver is expensive. And then of

course another risk would be some form

of delayedwide expansion. But outside of

these risks, because I do think they are

risks, but I do think that at some point

they will go away. I think we will have

a wide expansion of robo taxi. I think

we'll get rid of the safety driver and

we'll probably get to purely

teaoperated. I mean really all the

safety driver did in our case was take a

situation where it was obviously stuck.

It could have remotely said, "Hey, I'm

stuck. Should I bias and follow this

lead car or should I just stop?" And a

teleoperator could have taken over at

that point. you really didn't need

somebody in the car. Like the safety

driver already in my opinion feels

redundant and not necessary. Like no

offense to the individual who was with

us. This is just sort of broadly I feel

like they're mostly redundant. We don't

already need them at all which is great

because that all comes into the

valuation for the actual stuff. Now this

is predicated on Tesla actually fixing

how they bill. Right now, if you change

destinations, it will only charge you

for your last ride. So, we were in the

car for 36 minutes and only got build

$4.17

because our last destination was pretty

close to our final destination.

>> Ride history.

>> Oh, so it it only charges us 4.7. Wait,

>> it Oh, that's a bug. They only charged

us the final destination even though we

rode for 34 minutes,

>> which to put it Yeah. To put it into

perspective, I think my 15minute rides

for Uber were $40 each way. Yes. Or no,

Whimo. Whimo.

>> That should have been $50.

>> $40 each way.

>> Yeah.

>> What?

>> That's crazy.

>> So, this should have been actually

closer to 80 if it were San Francisco

prices.

>> 100%.

>> That's nuts. So,

>> all right. Well, there it is.

>> You don't owe me anything.

>> No, stop. I'll make sure you get to 420.

>> Yeah. Yeah. This is where things get

really interesting because something

that you need to know about robo taxis

is robo taxis will never have a

valuation like an Uber because the

reality is with a robo taxi the revenue

isn't going to the Uber driver. That

money that's being made for the drive is

going to Tesla which means the Tesla

shareholders are the ones who benefit

from the rides. It's kind of like hiring

a fleet of terminators to go work for

you and then you are reaping that return

on investment. That is the big

difference here between Tesla and Uber.

Tesla is not another Uber. Tesla is not

just creating an app and a platform for

other people to go make money on your

platform. That's like Upwork. Tesla

instead is creating an army of

terminators to go do an Uber service and

replace the Uber infrastructure.

That is pretty remarkable. Now, we have

to make assumptions when it comes to

math here. So, obviously, everybody's

going to have a different opinion on

assumptions, but I actually think the

numbers are pretty optimistic. So, take

a look at this. If a robo taxi does 1

million trips per day, you know, maybe

we use 50,000 uh vehicles doing 20 trips

per day. Uh I like to assume a revenue

per minute of about $1. However, I water

that down to only 30 cents uh with uh

and the reason I do is I assume a 30%

utilization because I think 70% of the

time you're going to be either empty

lagging to get to your next sort of

customer waiting for a customer order

because you want cars available when

people click, hey, I want a ride. You

want a car ready. So, that means there's

going to be some waiting time. So,

there's waiting time and there's empty

leg time. Uh then you also have cleaning

time and charging time. So in my

opinion, you've got maybe 20 minutes of

utilization of these vehicles per hour.

Now with that said, I think that each

robo taxi trip will probably be on

average about 10 minutes. I think Uber

trips are a little on average longer

because they're not geoence to cities.

And maybe in the future, e as we have a

broad expansion, I could take a, you

know, a Tesla robo taxi from LA to

Vegas, but I think that'll be way down

the road. I think at first we'll stay,

we'll have like a broad release and

we'll have robo taxis in San Francisco

and LA and Chicago and New York, but

they'll all individually be in their

little radi, so to speak, so they can

always go home and charge and they have

sort of their little base. That will

change in the longer term, but anyway,

that's where I'm going with 10 minutes.

If you want to change the assumption,

change the assumption. Okay. So then

with a safety monitor, let's not even

talk about this. The costs are just like

really really bad if you have a safety

driver, which I think is mostly

redundant. So I I don't even like

talking about it because we don't even

need them. But it's extremely expensive

to pay somebody probably, you know, 20

bucks an hour in a wage plus workers

comp plus uh the liability

insuranceances and all the nonsense and

the training and the paid time off and

all the headache that goes with having

employees. You're probably frankly

looking at 30 to 40 bucks an hour for

that person plus the tea operated staff

plus all the oopsies and incidentals and

crap. I really think you're probably

with safety monitors just purely losing

money. Now, we're doing it right now

because we know that if there's one

oopsies with the robo taxi, then the

stock's going to plummet by, you know,

10 years worth of safety monitor costs.

Elon knows that. Everybody knows that,

right? So, that's why there's a safety

monitor. But to actually fundamentally

understand this, you have to do so

without the cost of the safety monitor,

which really based on my experience

already, I think is mostly redundant.

the tele operators can do pretty much

everything. That said, if I do not

consider cap X uh as in investing into

the actual vehicles and maintenance and

charging, although charging would be

more of probably an opex as maintenance

would be, but that's fine. The numbers

aren't too terribly different. Just keep

this in mind. Just purely thinking about

robo taxi revenue minus staff costs. So

revenue at, you know, a buck a minute,

30% utilization, costs at about 10 cents

for the teleaoperated staff per minute

because they can handle multiple at a

time. They're not needed all the time.

You get the benefits of AI and all the

other nonsense. Uh, at 50 times price to

earnings, you probably have with a

million robo taxi rides per day, only

about $10 of share impact in value.

That's nothing. That's not really worth

it. You really have to get to the right

columns for this to be valuable, which

it gets very valuable very quickly. If

you take off depreciation and some of

the opex, I think then you'll be down at

closer to $7.50. Not that much. Now,

where you got to get to is about 10

million vehicles per day because that's

when it starts looking or rides per day.

That's when you take the same numbers,

you extrapolate it by 10, and you get

about $75 per share in value for a robo

taxi network. That's after, you know,

depreciation and and some of these other

expenses. That's actually pretty decent.

Unfortunately, today, I think that the

market is pricing in that we're going to

replace pretty much all Uber rides at

about 30 million rides per day, and this

is in like 70 different countries. So, I

think the markets are probably over

here. You know, you put about 100 bucks

on the manufacturing side, and then

maybe $220 for the robo taxi. Although

you got to throw some Optimus in there,

although that's, you know, that's that's

many years out. You know, you could

throw Optimus and insurance and

semi-truckss and all that into sort of

the future icing on the cake bucket. But

markets right now are probably over here

on the right side because markets are a

little just sort of euphoric and excited

right now. So, you know, a lot of value

is probably already priced in. But the

point is,

just forgetting about the share price

for a moment, there's actually a lot of

serious potential earnings per share

that we could make with robo taxi. And

my bottom line is we don't need the

safety driver. We could make 21 cents a

share with a million rides a day, two

bucks with 10 mil, 643 with 30 mil. Like

we'll be somewhere in this range. It's

going to make money as soon as we get

rid of those safety drivers, which we

will. Again, we don't I don't even think

we need them right now. Even with the

edge case scenario I saw, at no point

did I feel uncomfortable. I felt very

happy and excited about this. This is

actually better than I expected. So,

congratulations to the Tesla team. This

is very exciting. Frankly, all without

liar. So, go Tesla, go Elon, go robo

taxi.

Have hands down better than expected.

Does that mean stock is a screaming buy

right now at these valuations?

Ultimately up to you. Anyway, thanks for

watching. Check out House Hack, my real

estate startup. And we'll see you in the

next one.

>> Very, very cool. Thank you so much. How

do people follow you?

>> Oh, they can find my YouTube channel,

Ellie and Space, or ES TV on X. I'm also

on X.

>> Awesome. Thank you so much.

>> Thank you. And you know, I I hope you

can ride in a Whimo, too. I I would

recommend it.

>> Thank you. Why not advertise these

things that you told us here? I feel

like nobody else knows about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.