Tesla’s Future Value

Tesla’s Future Value

Tesla’s Future Value : Elon Musk has previously stated that all Tesla vehicles will become “appreciating assets.” As one might expect, this provoked a great deal of confusion. After all, vehicles are known to be some of the most depreciating assets, losing thousands in value as soon as they are driven off the lot. How can an old Tesla be more valuable than a new Tesla?

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As it turns out, an old Tesla will never be more valuable than a new Tesla. However, if the prices of new vehicles are continuously raised, old Teslas may indeed increase in value over time. We’re not talking about a small increase in price—Elon Musk states that new Tesla vehicles will eventually sell for several times what they are currently going for. This would place higher-end versions of the Model S north of $300,000.

Musk justifies this increase in price with his long term vision for Tesla. Specifically, he claims that once the company solves vision and can implement full self-driving abilities, Tesla vehicles will become income-generating assets. When not in use, they will function as robotaxis, ferrying passengers from place to place and collecting fares for their owners. If the company can indeed develop such capabilities, Tesla has no incentive to sell vehicles for a price cheaper than what they would earn themselves by choosing to operate the vehicle as a robotaxi. Indeed, Musk claims that Tesla will likely operate its own fleet of robotaxis.

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This is part of a larger push towards transportation as a service, foretold by the rise of companies like Uber and Lyft. By using self-driving capabilities, Tesla hopes that its vehicles will be able to undercut these companies, as well as traditional Taxis. However, even though there is no driver to pay, Teslas are by no means cheap and will inevitably have higher maintenance costs than a typical taxi or Uber car. Additionally, driverless vehicles may be more prone to vandalism.

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While interesting to ponder, it will be a long time until Musk’s vision is fulfilled. Solving vision is considered a holy grail of artificial intelligence and an immensely difficult task. Furthermore, operating fleets of driverless vehicles will lead to complicated regulations disputes and potential lawsuits. Musk has a tendency to provide overly optimistic timelines—in this case, there’s no avoiding that this will be a long way off.

Tesla’s Future Value Written by Daniel DiPietro, Edited by Matthew Durborow & Alexander Fleiss

Source: https://electrek.co/2019/07/08/tesla-will-stop-selling-cars-full-self-driving-elon-musk/