As I understand it, Teslas might appreciate once they complete Autopilot. Will they appreciate? How done will Autopilot have to be? Will it be significant? Will it be fairly long term or just sort of a blip until other systems/retrofits come online? Will older Tesla's that don't have it depreciate faster?
Side note: Let's say Autopilot makes a car much safer than any other system, is Tesla obligated to make the safety part free to other car manufactures or make aftermarket kits available? As a shareholder I would be proud to see them do it if it saved a lot of lives. What if they gave all of autopilot away for free in exchange for a cut of the taxi revenue? What about insurance ramifications?
Anyway I thought this might make for an interesting discussion since it is supposedly on the horizon, just like last year, and the year before that...
There are two parts to the future appreciation, but both are fully dependent on delivering Robotaxi functionality, not just Autopilot driver assist features. 1 is delivery on Robotaxis. 2 is increased probability of delivery on Robotaxis leading to higher value for the FSD option (but i'm not sure this increased option value alone will ever be enough to offset normal car depreciation).
I think the reason some people seem to struggle to get their head around the appreciation is just that they simply do not accept Robotaxis are ever possible. If Tesla does indeed deliver on Robotaxi functionality, there is 100% certainty the price of Robotaxi capable Teslas will appreciate significantly, I don't see how anyone can even debate this. What would you pay for something that can potentially initially print you over $70k per year with zero work?
For example, a single Tesla Robotaxi in the US with the same pricing and utilisation rates as Uber/Lyft ($2.5 per mile, 70% passenger miles) should be able to drive around 88k miles per year (15 hours per day, average 16 miles per hour), making $150k revenue and $138k gross profit in a single year. How much of this gross profit goes to Tesla vs the owner is entirely up to Tesla. If Tesla takes a higher cut of revenue, then the value of the Robotaxi to an owner is lower. I would guess around 50% of gross profit could be a good balance, leaving around $70k gross profit for the car owner. On this structure a new Tesla owner likely has to pay well over $100k upfront price of the FSD option to Tesla upfront.
Uber & Lyft's overall average revenue per mile are lower than the US due to Asia/Latam country and scooter mix, but overall in 2018 Uber and Lyft together made 30 billion miles of customer journeys making $50bn in gross bookings and with 5 million active drivers in the final quarter. This 30 billion miles and 5 million drivers could be replaced by about 500k Tesla Robotaxis - and on the Robotaxi cost base these journeys would make a total $43bn gross profit (compared to the approximately $0 gross profit made by Uber & Lyft).
Of course, if Tesla released 500k Robotaxis the cars wouldn't make quite this much money - the increased number of taxis on the roads would reduce utilisation from the current c.70%. While Robotaxis are still competing with Uber/Lyft (US breakeven at $2.5-3 per mile) and taxis (US breakeven at $3-3.5 per mile), there is no reason for Tesla to price its Robotaxi journeys much less than $2.5 per mile in the US.
Looking globally, beyond Uber & Lyft's markets, I think it would take 2 to 4 million Robotaxis to put all ride hailing, taxi and car rentals out of business, at which point Robotaxis start competing with themselves and then there is an incentive to lower pricing to increase ride hailing adoption rates. But until there are 2-4 million Robotaxis on the road globally, each Robotaxi is still likely to charge around $2 per mile and make over $100k gross profit per year.
As we go from around 4 million Robotaxis globally to around 200-300 million, the price per mile is likely to be slowly driven down towards the cost of personal car ownership of around $0.6-0.7 per mile (as more and more people make the decision to rely fully on Robotaxis). Past this point, as more Robotaxis are built, price should be driven closer to the EV AV operating cost of c.$0.2 per mile, with Robotaxis now driving a significant increase in annual miles travelled as people switch from public transport, travel more due to the lower cost and potentially move further into the suburbs now transport is more easy. But this is a long time away. I think Robotaxis should still make over 50% margins until more than 200 million are on the roads.
