Private cars used to command 85%–90% of trips for one simple reason: they were cheap. TSLA’s Robotaxi cost offensive could flip ownership, an asset-heavy purchase, into a service-based model.The legacy pain point is clear: U.S. ride-hail costs about $2.5/mile vs. $0.7–$1.1/mile for private cars, capping ride-hail’s TAM. Robotaxi attacks the cost stack head-on.

First, it eliminates the driver, the single largest cost, which is ~50%–60% of ride-hail expenses. This takes base operating cost down to $0.7–$0.8/mile, already at parity with U.S. private-car costs.

Second, vehicle costs fall sharply. Tesla’s Cybercab, purpose-built for autonomy, targets a BOM of $25k–$30k vs. Waymo’s ~$80k, with unboxed manufacturing further compressing costs.

Third, operating efficiency jumps: daily utilization rises from 7–8 hours to ~12, the empty-mile rate drops from ~40% to ~20%, and annual passengers miles per car climb from ~40k to ~90k. Fixed costs get materially diluted.

By the numbers: Dolphin Research estimates that by 2035, an optimistic case puts Robotaxi costs at ~$0.4/mile, while Elon Musk’s ultimate target is $0.2–$0.3/mile, both well below private-car cost floors. A base case of ~$0.6/mile is still below most private cars. Even a bear case of ~$0.8/mile would match some private-car costs.

Given Tesla’s vertical integration — in-house AD software and hardware plus Cybercab production — unit economics likely land in the $0.4–$0.6/mile range, positioning Robotaxi to undercut private cars. Mass production of Cybercab in 2026 would be a key milestone to accelerate the shift.