This CNBC interview, conducted with Tesla Founder/CEO Elon Musk and the David Faber from the CNBC finance team is worth a listen due to its discussion on the topic of autonomous driving. With AI in the news constantly, how leading car companies are tailoring this technology to the auto-industry is interesting. Musk himself said he had been sitting in an autonomous Tesla taking him through the streets of San Francisco, which is particularly difficult for driving thanks to the layout of the city (number of dead-ends, pedestrians and traffic), with no issues arising. 

“Tesla is the only car company selling cars where we believe the car is capable of achieving full-autonomy with a software update”

Interestingly, Musk mentioned Tesla are selling vehicles almost at cost, however per the vehicles terms and conditions, future updates that included automated driving will only be able to be run on the Tesla network itself. When a driver has then commenced monetising their vehicle, a profit sharing arrangement will be in place with Tesla itself, with Musk floating 50-50 or 30-70 as possible fee percentages. In Musk’s view, that changes the economics of selling a car and draws similarities to the attractive characteristics of the software industry.

“The value of a fully autonomous car is perhaps 5x the value of the initial purchase price. The utility of a normal passenger car, driving an hour or 1.5 hours a day or ten to twelve hours a week…if you’ve got a car that’s autonomous, that can be an autonomous Uber, the utility is going to be much higher. The utility could be fifty hours, active not for ten hours a week, but fifty. The eventual value to Tesla, used five times as much, Tesla is likely to make two or three times the original value of the car in Robo-taxi revenue”

Link to podcast