Elon Musk: Most people won’t buy cars anymore!

After the 2024 election, Elon Musk is betting on a new bet, a “Tesla iPhone.”

According to Fortune, Tesla CEO Elon Musk believes that in the future, owning a personal car will become obsolete and most people will switch to using “Robotaxi” services (Transportation as a Service) instead of buying their own cars.

The world’s richest billionaire emphasized that Tesla will deploy millions of self-driving cars (Robotaxi) and by mid-2026 there will be “millions” of them on the road, allowing users to hail a ride via an app like Uber but with fully autonomous vehicles.

‘The reality is that in the future, most people will not buy cars,’ Elon Musk said.

The Tesla CEO believes that the auto market is essentially on the brink of an inflection point, where household car ownership is no longer the default. Billionaire Elon Musk predicts that most people will rely on fleets of autonomous ride-hailing vehicles, using products like his upcoming CyberCab to get where they want to go.

Elon Musk’s New Bet

According to an analysis on Medium, the average car is used less than 6% of the week, and the rest of the time, if converted into a Robotaxi, it can pay back the owner and generate revenue.

Agreeing, expert Tony Seba and the RethinkX team predict that by 2030, the cost of using a self-driving car on a subscription basis will be cheaper than owning a personal car, thanks to the convergence of increasingly cheap batteries, solar panels, electric vehicles and autonomous technology.

That’s why Tesla executives say the new cars launched this year will just be more affordable versions of existing cars. Instead, the company is focusing on launching the CyberCab next year, a car without a steering wheel or pedals that will be produced in the millions for autonomous ride-hailing fleets.

Fortune reports that producing similar old models at a lower price could mean everything from cheaper materials, slower acceleration, and shorter operating range, but Elon Musk doesn’t care.

The main reason is that Tesla will only focus on two products, CyberCab and the Optimus robot.

Billionaire Elon Musk believes that this will be the company’s next breakthrough product after the Model Y.

According to Elon Musk, CyberCab will be a revolution for the entire industry when users can just call a car from their phone, without having to worry about maintenance, insurance, or depreciation when selling.

In addition, the car business model will also change when traditional companies are forced to switch to providing transportation services instead of selling cars, thereby competing with autonomous ride-hailing platforms.

Especially when Robotaxes become popular, the demand for used cars may decline sharply, creating a big shock to the market.

Business Insider (BI) reported that electric vehicles have lower maintenance and fuel costs than traditional gasoline vehicles, while lithium-ion costs continue to decline sharply, which could reduce the operating costs of Robottaxi.

Tesla also hopes that when operating 24/7, Robotaxi can distribute the fixed costs of the vehicle over more trips, helping to reduce the fare per kilometer of operation.

In addition, Tesla focuses on a camera-only solution for the self-driving system, expecting the FSD (Full Self-Driving) software to be safe enough for Robotaxi.

The American electric car company has developed the “Tesla Network”, an integrated self-driving car calling platform for all of its self-driving cars, from Cybercab to Model 3/Y, thereby gradually developing Elon Musk’s Robottaxi dream.

The Tesla boss also said that he will launch the first Robotaxi in Austin in June 2025 with a fleet of 10-20 cars, then expand rapidly when software and licenses allow.

Elon Musk believes that the development of self-driving electric cars for rent on demand will make personal car ownership obsolete, similar to the use of SIM-card phones in the smartphone era.

The billionaire even compared it to the lesson of Nokia’s collapse in the mobile segment before Apple’s iPhone.

Tesla’s iPhone

Since taking over as CEO of Tesla in 2008, Elon Musk has never completely replaced a model in the company’s history, even the Model S, which debuted more than a decade ago, according to Fortune.

Instead, Musk has been deeply skeptical of the auto industry’s approach to filling the market with cars of every conceivable style and segment.

When asked how many different models Tesla would need to sell 20 million electric vehicles annually, billionaire Elon Musk said no more than 10.

For comparison, that’s like Mercedes-Benz achieving its entire 2 million-car sales with just one product.

Elon Musk even compared the auto industry to the lesson of Nokia, the phone company that frantically tried to develop new shapes and styles of mobile flip phones while Apple developed the iPhone.

“They kept making flip phones to try to find another niche, someone wanted another phone with a different shape, a different color. But no, consumers just wanted a super smart phone that could do everything,” Elon Musk commented.

Using this comparison, Elon Musk said that the Model Y was Tesla’s first “iPhone” when it was launched in 2020, eventually becoming the best-selling car in the world with 1.1 million cars delivered to customers last year.

Tesla’s next “iPhone” product after the Model Y is the CyberCab mentioned above.

The Tesla boss outlined how his Austin factory, using a new manufacturing method, will churn out a CyberCab every five seconds.

That’s six times faster than GigaShanghai in China, Tesla’s most efficient factory, where a Model Y rolls off the line every 33 seconds.

The CyberCab will be followed by the Optimus robot, and Elon Musk has said that by now there’s no need for a “Tesla iPhone” because the robots can achieve a 50% gross margin.

He told investors that the bipedal robot will sell a million units a year by the end of the decade, potentially even by 2029. The plan is to eventually increase that to 100 million units a year.

“We expect to scale Optimus faster than any product in history. Tesla’s future is fundamentally based on large-scale autonomous vehicles and large numbers of autonomous humanoid robots,” said Elon Musk.