Elon Musk evades a question about Uber and raises more interesting questions in the process

Travis Kalanick, chief executive officer of Uber Technologies Inc., gestures as he speaks during the Institute of Directors (IOD) annual convention at the Royal Albert Hall in London, U.K., on Friday, Oct. 3, 2014. U.K. Chancellor of the Exchequer George Osborne told the IOD "clearly the economy is growing, unemployment has fallen sharply and business investment has picked up," Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Travis Kalanick

During yesterday’s conference call about Tesla’s second quarter financial results, Elon Musk refused to answer a question from a financial analyst about Travis Kalanick’s, Uber’s CEO, recent comments that his company would buy 500,000 Teslas in 2020 if they are equipped with Tesla’s self-driving technology by the end of the decade.

The short conversation was very revealing. Here it is in full:

Adam Jonas – Morgan Stanley

Hey, Elon, Deepak. First question, Steve Jurvetson was recently quoted saying that Uber CEO, Travis Kalanick, told him that if, by 2020, Tesla’s cars are autonomous, that he’d want to buy all of them. Is this a real – I mean, forget like the 2020 for a moment, but is this a real business opportunity for Tesla, supplying cars to ridesharing firms, or does Tesla just cut out the middleman and sell on-demand electric mobility services directly from the company on its own platform?

Elon Musk – Tesla’s CEO

That’s an insightful question.

Adam Jonas – Morgan Stanley

You don’t have to answer it.

Elon Musk – Tesla’s CEO

I think – I don’t think I should answer it.

From Musk’s response, it looks like Jonas was spot-on. This leads us to believe Tesla is either working on its own ridesharing service or they might really be in talks with Uber.

Jonas’ question originated from comments made by Steve Juvertson at a conference on future technologies earlier this year. Juvertson is a famous Silicon Valley venture capitalist, early investor in Tesla and currently a board member of 2 of Musk’s companies, SpaceX and Tesla.

His exact words were:

Travis recently told me that in 2020, if Telsas are autonomous, he’d want to buy all of them. He said all 500,000 of estimated 2020 production, I’d want them all, but he couldn’t get a return call from Elon.

Couldn’t get a return call? Musk is a busy man, but I doubt a future contract potentially worth $20 billion didn’t get his attention, unless he is working on his own taxi or ridesharing app?

Regardless of its current legal troubles in certain markets, Uber is a company to take seriously. Despise being half Tesla’s age, the company created in 2009 is estimated to be privately valued at over $50 billion. In comparison, Tesla’s market capitalization currently sits at $33 billion.

We might have to wait a while if Tesla is waiting for its autonomous driving technology to be ready in order to launch a competing service to Uber. During the call, the company announced a delay for the release of their ‘Autopilot‘ update, which should be pushed to Model S owners in the next few months instead of by the end of July like previously announced.

But it would probably be worth the wait, combining ridesharing, electric cars and autonomous driving is expected to bring down the cost per mile of transportation by an order of magnitude.

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  1. Jörg - 7 years ago

    🙂 thank you!

  2. quiviran - 7 years ago

    Elon Musk and Tesla have stood on some very high ground so far. Uber, not so much. Why would Musk align himself with a bunch of hucksters now? If Uber drivers ever get better at math, Uber will fail overnight. And they will not be sustainable if they ever bring the capital asset costs and operating expenses of a fleet of vehicles onto their books. Right now all of those costs are externalized onto the backs of the drivers. The drivers are just buying into the argument that their costs are only the marginal cost of driving a few additional miles in a car they have anyway. The Uber house of cards will fall if reality ever sets in.


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