Elon Musk says Tesla is ‘worth basically zero’ if it cannot make its cars self-driving

·2 min read

Elon Musk has said that Tesla’s value is significantly dependant on whether it can develop self-driving technology, otherwise the company is “worth basically zero”.

Speaking in a recent interview, the billionaire said that he wanted to fix a number of problems with Tesla vehicles – including improving the cars’ built-in web browser, which he said was too slow – but that the “overwhelming focus is on solving full self-driving”.

Mr Musk added that the feature was “essential. It’s really the difference between Tesla being worth a lot of money or worth basically zero”.

Tesla’s self-driving capabilities have recently been called into question. The National Highway Traffic Safety Administration has reported that from July of last year through 15 May, vehicles using Autopilot, “Full Self-Driving," Traffic Aware Cruise Control, or other driver-assist systems were in 273 crashes.

Tesla has about 830,000 vehicles with the systems on the road, giving it the highest ratio of crashes to self-driving vehicles. The next automaker with the highest was Honda. Honda reported 90 crashes using driver assisted systems, but Honda says it has about six million vehicles on roads in the United States. Subaru was next with 10, and all other automakers reported five or fewer.

Elon Musk has claimed that accidents cannot be the fault of Tesla - as data it extracted shows that Autopilot is not active in collisions. However, the NHTSA has said that it found 16 instances where Autopilot “aborted vehicle control less than one second prior to the first impact”.

Tesla’s features are deemed assistance systems, where the driver is always liable.

Mr Musk also said that the development of his self-driving cars is necessary as Tesla must make the cars more “compelling” to buy than other competitors.

"The life of a car, before it hits the junkyard, might be 20 years. Warranty is going to typically run out after four years and there’s a bunch of stuff that’s not covered under warranty," Mr Musk said, citing advice he received from an unnamed investor.

"If you’ve got a steady state fleet it means that 80% of your fleet is not under warranty," he said.

"So you can sell high margin replacement parts for the existing fleet and you can sell your new cars at effectively zero margin. It’s like a razor and blades thing."

Mr Musk has consistently missed self-set deadlines on self-driving technology. In 2019, he said that he was "certain" that Teslas "will be able to find you in a parking lot, pick you up, take you all the way to your destination without an intervention” – even doubling down on the prediction by stating: "That is not a question mark”.

In 2021, Mr Musk made the claim again – saying that Teslas would become fully autonomous by 2022.