Elon Musk says Tesla will have 1 million robo-taxis on the road next year, and some people think the claim is so unrealistic that he's being compared to PT Barnum

  • Elon Musk said Monday that Tesla will have 1 million autonomous taxis on the road "next year."
  • Wall Street analysts, investors, and other industry insiders were skeptical, given Musk's history with over-promising. 
  • Jim Cramer of CNBC's Fast Money, once a Tesla bull, compared Musk to the great showman PT Barnum. 

Elon Musk unveiled grand plans for Tesla's network of robo-taxis on Monday, with his sights set on a million autonomous electric vehicles shuttling passengers within a year.

"I feel very confident predicting one million autonomous robo-taxis for Tesla next year," Musk told a room of investors and Wall Street analysts at the company's Palo Alto headquarters. "Not in all jurisdictions because we won't have regulatory approval everywhere, but I'm confident we will have regulatory approval at least some where, literally next year. " 

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FILE - In this Feb. 9, 2019, file photograph, buyers look over a Model 3 in a Tesla store in Cherry Creek Mall in Denver. Tesla is shifting all of its sales from stores to the internet, saying the move is needed to cut costs so it can sell the mass-market Model 3 for a starting price of $35,000. The Palo Alto, California, company announced the change Thursday, Feb. 28. (AP Photo/David Zalubowski, File)
FILE- In this Feb. 9, 2019, file photo, a sign bearing the company logo is displayed outside a Tesla store in Cherry Creek Mall in Denver. Tesla’s top lawyer is leaving the company after only two months on the job. Tesla said in a prepared statement Wednesday, Feb. 20, that General Counsel Dane Butswinkas will return to a legal practice in Washington, D.C. He’ll continue to work for Tesla as outside counsel. No reason for the departure was given. (AP Photo/David Zalubowski, File)
FILE--In this Saturday, Feb. 9, 2019, file photograph, buyers look over a Model 3 in a Tesla store in Cherry Creek Mall in Denver. (AP Photo/David Zalubowski, File)
FILE--In this Saturday, Feb. 9, 2019, file photograph, buyers look over a Model 3 in a Tesla store in Cherry Creek Mall in Denver. (AP Photo/David Zalubowski, File)
Cars are driven past a Tesla showroom, as Tesla announces it would close many stores and its sales would now be online-only around the world, in west London, Britain, March 1, 2019. REUTERS/Toby Melville
A Tesla Model 3 car is displayed at the Canadian International AutoShow in Toronto, Ontario, Canada, February 15, 2019. REUTERS/Chris Helgren
A Tesla Model 3 car is displayed at the Canadian International AutoShow in Toronto, Ontario, Canada, February 15, 2019. REUTERS/Chris Helgren
SHANGHAI, CHINA - FEBRUARY 22: More than 1,800 Tesla electric cars, including over 1,600 Model 3 from the United States, arrive at Pudong Waigaoqiao Port on February 22, 2019 in Shanghai, China. Freight ship 'Morning Cindy' carrying more than 1,800 Tesla electric cars, including over 1,600 Model 3 from the United States, arrived in Shanghai on Friday. (Photo by Zhao Yun/VCG via Getty Images)
SHANGHAI, CHINA - FEBRUARY 22: More than 1,800 Tesla electric cars, including over 1,600 Model 3 from the United States, arrive at Pudong Waigaoqiao Port on February 22, 2019 in Shanghai, China. Freight ship 'Morning Cindy' carrying more than 1,800 Tesla electric cars, including over 1,600 Model 3 from the United States, arrived in Shanghai on Friday. (Photo by Zhao Yun/VCG via Getty Images)
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Tesla estimates the cost of running a robo-taxi on the "Tesla network," onto which any owner can add their car, to be less than $0.18 per mile. Using a sample fare of $1 per mile, that translates to $30,000 per car annually or $30 million when 1 million cars are running, as Musk predicts.

Tesla robo taxi network revenueTesla

"Expect this to operate sort of like a combination of the Uber and the Airbnb model," Musk said. "So if you own the car you can add or subtract it to the Tesla network and Tesl would take 15 or 20% of the revenue. In places where there aren't enough people sharing their cars we would just have dedicated Tesla vehicles."

Autonomy is key for ride-hailing, and not just for Tesla. Uber and Lyft, easily the two biggest companies in the space, are spending huge chunks of their revenue on paying drivers. Many Wall Street analysts have suggested that with self-driving cars, that expense could be minimized, giving both companies a gateway to profitability. 

Of course, not everyone was so quick to jump onto Musk's vision. The billionaire has, after all, a track record of making grandiose promises that don't pan out on the same scale or timeline. CNBC's Jim Cramer went so far as to compare Musk to the famous showman and circus leader PT Barnum on air.

Wall Street analysts were also underwhelmed.

"The Tesla Network robotaxi plans seemed half baked, with the company appearing to either not have answers to or not even considered pretty basic question on the pricing, insurance liability, or regulatory and legal requirements," Jeff Osborne, an analyst at Cowen, said in a note to clients Tuesday. 

"We see the focus on FSD as a desperate attempt to convince Tesla car buyers to pay the $8,000 for the "FSD" option, even though the company acknowledges the software doesn't work and they will have a new next-gen solution in ~2 years."

More from Business Insider:  
Elon Musk says it's 'basically crazy to buy any other car but a Tesla' 
Tesla is taking direct aim at Uber and Lyft with claims it plans to roll out 1 million robo-taxis by next year 
Elon Musk slams rivals' self-driving-car tech, says 'anyone relying on lidar is doomed'

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