00:00 Speaker A
More broadly, just beyond just Tesla, when you think about the economics of a robo taxi market, Ross. Like not near term, not medium term. Let’s think long-term.
00:10 Speaker A
What do what does that look like to you? What what do you think growth and margins for such an industry could look like?
00:16 Ross
You know, I spend a ton of time thinking about this because of Tesla and because of Google, which is now my largest investment in my fund GK and also for my firm where or that’s not true Nvidia is still larger, but but in my fund, Google is our top pick right now and and you know, because they’ve solved so many of of these issues. So longer term, what does this look like? Well, it looks like an ad platform to me.
00:33 Ross
Because it only cost about a dollar a mile or less to buy a Tesla and just drive it around. So until the cost is below a dollar a mile, which right now it’s about three times that cost to run to use a robo taxi, you know, it’s still expensive to ride share relative to owning your own car. So first that has to be solved.
00:49 Ross
Once that’s solved and the costs comes down, then you get into this race to the bottom because you have no barriers to entry. You have lots of competitors that have Nvidia based systems that will all be equipped in the next five years.
00:58 Ross
And so the real question is, how can you generate revenue with a robo taxi when you’re not making much money on fairs. And so that’s advertising and that’s where Google is also in the lead. You’ll probably be watching YouTube in the car, they’ll be ads on the car or in the car, but in the future they’ll have to be other revenue sources driving the the profit margins of robo taxi. So I see this as a highly competitive, difficult business and one, you know, that I think is already kind of being mastered by you you have the old player in Uber and you have the new player in Waymo.