Elon Musk claims Tesla robotaxi will be as cheap as the bus, does the math work?

Elon Musk is claiming that Tesla Robotaxi will be as cheap as the bus, which “won’t be needed” when it “rolls out unsupervised full self-driving.”

Does the math work?

This weekend, Musk responded to a misleading claim that electric buses don’t work in colder climates.

The first part of his comment accurately explains that if electric buses are having issues in the winter, they simply weren’t designed for it, but electric buses can certainly work in cold climates when appropriately designed for it.

However, the second part of his statement is a bit more controversial:

Then the battery packs of the buses are too small.

Teslas can operate well even above the Arctic Circle.

Also, buses will not be needed when Tesla rolls out unsupervised full self-driving, as they will take people to point to point for a similar cost to a bus ticket.

Musk claims that Tesla’s autonomous taxi service will be similarly priced as a bus ticket.

Does the math work?

For example, New York City’s Metrocard, which covers both local buses and subways, cost $132 per month.

The average daily transit commute in the city is reportedly 13 miles. This adds up to $0.34 per mile.

Interestingly, after Musk first announced Tesla plan to launch an autonomous driving service using its existing electric vehicles, a study from the University of Virginia, and the University of Texas at Austin tried to estimate the cost of such a service.

The study came to the conclusion that autonomous rides in a Tesla Model 3 would cost about $0.663 per mile.

That’s about twice as much as public transit in New York City, but it is significantly cheaper than a Uber ride, which generally ranges between $1 or $2 per mile unless it is in surge pricing.

Electrek’s Take

I think an autonomous ride-hailing system powered by electric vehicles would have tremendous value, but we still don’t know exactly how disruptive it is going to be. Some overvalue it and others undervalue it.

It’s fairly obvious that it would be extremely disruptive for ride-hailing services like Uber.

However, Musk is overpromising by claiming that it will disrupt public transit. In some markets, it might be more competitive and shave some demand from the top of the public transit market, but I doubt it will be a huge chunk based on these numbers.

Of course, Tesla also needs to roll out its “unsupervised” self-driving and there’s no clear timeline for that either.