According to Electrek, Tesla, which famously doesn’t have a public relations department and doesn’t spend money on advertising, is now looking to change its referral program rewards again, removing the reward of a thousand miles of free Supercharging for people who refer new customers.
I had a thousand miles of free Supercharging because I used the referral code of a cousin when I bought my Tesla. I bought it during the pandemic so I wasn’t going anywhere. I went ahead and supercharged a few times just to see what Supercharging was like. Since my free Supercharging miles expired six months after I bought my car, it’s all gone now even though I used only about two hundred miles of free Supercharging.
It’s certainly true that some people got lots of free Supercharging because they had a YouTube channel with Tesla-themed videos so lots of people used their link when they bought their Tesla. Tesla says it has spent twenty-three million dollars in the last quarter alone on free Supercharging rewards. Tesla relies on owners, and YouTubers to do their advertising for them. And that advertising must be working since Tesla seems to be able to sell as many cars as they can make. I’m seeing Teslas everywhere I drive these days.
According to the article in Electrek, they’re going to stop awarding miles to people whose referral code was used. In fact, they’re going to stop using referral codes entirely. That will prevent some people from getting large rewards because their referral code was attached to their YouTube videos. Instead, they’re going to use the Tesla app to link potential Tesla buyers to current owners who are willing to give test drives. If the potential buyer who took a test drive becomes an actual buyer, the person who gave the test drive will get rewarded. The article doesn’t say what, exactly, the reward will be.
So, thinking about this new situation, it seems like Tesla wants to reduce the number of test drives at the Tesla stores. There was a time when Elon Musk wanted to eliminate the stores entirely, but cooler heads convinced him that people want test drives, and test drives lead to sales. It looks to me like he’s trying again to reduce his expenditures for salespersons. So what does that mean for us, the current Tesla owners?
I suspect that everything will depend on the reward. Do I want to spend time giving test drives to strangers in my personal car? Not really, unless the reward is interesting. Let’s face it, 1,000 miles of free Supercharging would cost about forty-two dollars. And, if that was the reward for making a sale, you’d get it only when you actually made a sale. You might need to take three or four people on test drives, maybe more than that, in order to make a sale. Let’s say it’s four test drives per sale. Each test drive would last around a half-hour. So that’s two hours work to earn 1,000 miles of Supercharging, around forty-two dollars, or $21 an hour. That sounds like a lot if you’re an unemployed person, but it’s not much if you’re a person who can afford a Tesla Model 3 or Model Y. It’s peanuts if you’re a person who can afford a Tesla Model S or Model X, and it’s inconsequential if you’re a person who can afford a Tesla Roadster.
And why does Elon Musk want to do this? He wants to sell cars without spending much money on the sales process. Tesla makes great cars, but I don’t think they’re going to sell themselves. I have to hesitate before I tell someone as successful as Elon Musk how to run his business. I’m not as smart as he is. But I suspect that the reward for making a sale will have to be more interesting than a thousand miles of free Supercharging. So far, the reward is unspecified. Stay tuned, though. We should find out more soon.
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During Tesla’s Q1 earnings call, Tesla talked about its plan for its upcoming robotaxi network and even showed off a design for the app that would allow customers to request vehicles, much like Uber and Lyft.
While Tesla plans to unveil the robotaxi, officially now called CyberCab this August, a true autonomous taxi is at the very least, a couple of years away. So why is Tesla so eager to show off an app and start offering a Tesla taxi service?
in 2023 Uber had a revenue of 37.28 billion, while Lyft had a much smaller revenue of 4.4 billion. For comparison, Tesla’s revenue last year was 96.77 billion. A taxi service, even one operated by humans can be incredibly lucrative. While Tesla’s ultimate goal may be an automated taxi service, they may be itching to get into the space.
Tesla’s robotaxi was initially supposed to be a taxi service owners would lend their vehicles to. While that’s still the plan, Tesla wants their own vehicles to be a part of the service as well.
Will the Robotaxi Service Start With Tesla Drivers?
Tesla comparing themselves to Airbnb and Uber during their earnings call is intriguing. While Tesla can start producing robotaxis almost whenever they want, it’d likely be smart to wait until autonomy is solved so they’re not limiting themselves to current FSD hardware.
While full autonomy is likely several years away, Tesla seems to be eager to make this push toward a Tesla-owned service. Is Tesla thinking about operating their own Uber-like service? Tesla could be thinking about releasing their future robotaxi app and service in “beta,” letting current Tesla owners operate their own vehicles on the service.
This could result in several benefits for Tesla, not only letting them test their service but also opening up another revenue stream. This would allow Tesla to start operating their robotaxi network as soon as this year, and then slowly replace drivers and owner vehicles with Tesla-owned robotaxis.
Tesla Shows Off Robotaxi App
Tesla showed off it's robotaxi app
At the earnings call, Tesla also showed off a design of their robotaxi app. While it feels early to design an app for a service that could be years away, Tesla appears to be preparing itself for the future and getting customers excited about the prospect.
Tesla showed off five screens of the app, essentially showing how you’d request a robotaxi, how you can view its progress, and control certain features of the vehicle. Through the various screens, you can see most of Tesla’s Autopilot features coming to fruition in terms of autonomy, such as summon, self-driving and eventually Autopark.
Summon - Much like Tesla has re-thought the interior of a car and so many features, you can see the same mechanics applied to the app. To request a vehicle, you simply hold down a summon button and you’ll be presented with an estimate of when a vehicle will arrive.
Set Preferences and Destination - On the second screen, you can see the vehicle’s current location on a 3D map, possibly alluding to future FSD visualizations. It also lets you set your destination and set the climate temperature to your preference.
Trip Progress - While you’re traveling in the vehicle, you’ll be able to view trip information as well as set entertainment options.
Recap
Tesla had a lot to talk about during their earnings call and specifically about the Robotaxi — more information was revealed than ever before.
While there are various things at play to make a service like this come together, we can easily separate them out into separate components.
There’s the robotaxi itself, which Musk recently said would be similar to Tesla’s next-gen vehicle without a steering wheel. However, during this earnings call, he revealed that Tesla will save its new “unboxed” manufacturing process for the robotaxi and use a more traditional method for their next vehicle.
Then there’s FSD itself, while it’s crucial to operating a driverless robotaxi network, it’s not necessary to start a Tesla taxi service.
The last piece is the ride-hailing component itself and how it’s managed, and Tesla was happy to show this off, which makes us believe that it may be closer to reality than many think. While Tesla needs all three of these components to come together to operate a true robotaxi network, they piece them together separately, much like they’ve done with Autopilot. Initially, Tesla only released auto-steer then slowly added on summon, Autopark and city driving.
When we look back at Tesla five years from now, we may very well look back to this earnings call and say this was the pivotal moment when Tesla started transitioning to a services company.
Tesla has invested billions of dollars over the years toward vehicle autonomy. The mission continues as Elon Musk and Tesla now prepare to unveil their ride-hailing product, Robotaxi this August. Or, as Musk called it on Tuesday, Tesla CyberCab.
Early Days
Five years ago, during Tesla’s Autonomy Investor Day in April 2019, Elon Musk said he felt “very confident predicting autonomous robotaxis for Tesla in the following year [2020]”. At the time, Musk added a bolder claim, predicting that Tesla wouldn’t even make cars with steering wheels or pedals by 2022. While timeliness may not be Musk’s strong suit, he has a track record for getting things done that others were unwilling to try or thought were impossible. Musk later admitted he can be overly optimistic and said “sometimes I am not on time, but I get it done.”
Now, 5 years later, we have the robotaxi unveiling scheduled for August 8th. After the release of FSD v12, it’s clear that we’re much closer to autonomy than we were in 2019, although FSD v12 is still a far cry from full autonomy.
While Tesla still has the robotaxi unveiling scheduled for August, Tesla announced yesterday that it’d be prioritizing a simpler “next-gen” model that could be released by early 2025.
Latest Updates
On the conference call, Musk added that Tesla now has over 300 million miles driven with FSD v12 since it was launched just last month. He added that it's becoming “very clear that the vision-based approach with end-to-end neural networks is the right solution for scalable autonomy”.
Tesla said it has been investing in the hardware and software ecosystems necessary to achieve vehicle autonomy and a ride-hailing service. The company is confident that it can establish a scalable and profitable autonomous driving business by employing a vision-only architecture.
think of it [Tesla] as combination of Airbnb and Uber meaning that there will be some number of cars that Tesla owns itself and operates
Tesla = Uber + AirBnb
Later on, Elon Musk unveiled that the new service will operate and result in a mix between Uber and Airbnb where the Tesla driver decides if and when he wants his Tesla to be used and by whom. Tesla stated:
“We believe the Tesla software experience is best-in-class across all our products, and plan to seamlessly layer ride-hailing into the Tesla App.”
Tesla’s CEO clarified that the owners will be able to add or remove their car from the fleet “whenever they want” adding that it will be up to them to decide if they want to only let the car be used “by friends and family or only by five-star users or by anyone at any time”. The flexible program will, just like Airbnb, allow the owners to take the car out of the market when they want.
The upcoming ride-hailing service will enable users to easily request a Tesla vehicle, control the car's temperature, monitor its real-time location, and adjust the audio system. The only question is when.
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