Robotaxi Cost Collapse
Conor Watkins@conor
−9.0%
since Oct 7
The idea
I believe robotaxis win by ripping the driver's hour out of a ride's cost, so fares fall hard and most savings flow to riders, squeezing ride-hail middlemen out. I own the cheapest car to build, Tesla, alongside Alphabet's Waymo as co-leader, the suppliers who get paid per car regardless of fare wars (sensors, chips, fleet manufacturing), and a long-haul freight bet on the same cost logic. I keep cash on hand, avoid any single name over a fifth of the basket, and plan to hold for years through the early bumps rather than trade the headlines.
What it owns
- Robotaxi fleets that don't manufacture their own chips depend on self-driving computers from these suppliers, making their revenue resilient regardless of fare pressure. · NVIDIA CorporationIt supplies the computers powering self-driving software for fleets and carmakers that do not build their own chips, so it profits as driverless cars multiply regardless of which operator dominates., Mobileye Global Inc.It supplies self-driving chips to carmakers choosing to buy autonomy rather than build it, making it a lower-cost exposure to the many brands adopting autonomous driving technology.21%
- The robotaxi race will decide whether fleets use lidar, cameras, or both, so owning sensor makers on both sides of that split hedges the outcome. · Hesai GroupIt sells lidar sensors at the highest volume and lowest cost to non-Tesla fleets, so it wins if laser-based systems remain the standard for driverless vehicles., Ouster, Inc.It is the US-made lidar alternative, providing exposure to the scenario where Chinese sensor makers face restrictions and laser-based systems retain a role in driverless cars., ON Semiconductor CorporationIt makes the image sensors inside automotive cameras, covering the other side of the sensor race if camera-only systems become the driverless standard and camera volumes grow.19%
- Building robotaxis at a fraction of competitors' cost gives the lowest cost per ride in a price war once human drivers are gone. · Tesla, Inc.Building robotaxis at roughly one-fourth the cost of competitors gives it the lowest cost per ride once drivers are no longer needed, but this depends on Cybercab reaching that target cost and scaling paid driverless service to more cities.18%
- Operating thousands of driverless cars today while rivals operate hundreds proves the model works and builds an early lead in scale. · Alphabet Inc.Alphabet owns Waymo, which already operates thousands of driverless cars and demonstrates riders will use vehicles with no human operator, though thin margins from price wars could squeeze fleet economics.14%
- Whoever builds the cheapest driverless cars still needs manufacturers to make them, creating stable revenue from the winning fleet operator. · Magna International Inc.It builds Waymo's robotaxis in Arizona and gets paid per vehicle regardless of how low driverless fares fall, providing stable revenue from the operator with the current scale lead.12%
- Removing the driver from long-haul trucking cuts costs the same way robotaxis do, since labor is an even larger share of shipping expenses. · Aurora Innovation, Inc.It applies the same cost collapse logic to long-haul trucking, where removing the driver cuts expenses even more than in robotaxis because labor represents a larger share of freight costs.6%
- Cash10%