GM's self-driving Chevrolet Bolt EV. Photo: GM

Automakers like GM and Ford are banking on the the assumption that if they can lower the cost per mile of self-driving taxis to $1 or less, demand will skyrocket. But a new analysis in the Harvard Business Review suggests their model may be flawed.

Why it matters: Carmakers are tearing apart their traditional businesses — exiting underperforming markets, closing factories and laying off workers — while diverting investment into future mobility technologies. But if self-driving taxi fleets don't take off as expected, their financial plans could be at risk.

What they're saying: Ride-hailing costs around $3 per mile today, according to GM, but only accounts for 1% of miles traveled. The driver represents most of that cost.

  • Without a driver, the cost per mile falls to around $1 per mile.
  • At that point, robotaxis will be so cheap everyone will travel that way — or so the theory goes. It's all about deploying at scale, as GM Cruise CEO Dan Ammann likes to say.

Yes, but: Authors Ashley Nunes and Kristen Hernandez see it differently.

  • They found the estimated cost per mile of a robotaxi in San Francisco was 3 times higher than the cost of owning an older vehicle.
  • The gap was due to lower utilization rates than carmakers assume. (Current taxis are in use about 50% of the time.)
  • Even if robotaxis had substantially higher utilization rates, the cost of providing remote oversight by humans must be factored in.
  • The only way for robotaxis to be cost competitive with older cars is if the remote operators are paid well below minimum wage, the authors said.

Consumer subsidies will be needed to realize the life-saving benefits of AVs, they conclude.

The bottom line: Self-driving cars need to be affordable to serve those who need them most, and to keep carmakers' strategies afloat.

Go deeper: Here come the robotaxis

Go deeper

Trump commutes Roger Stone's sentence

Roger Stone arriving at his sentencing hearing on Feb. 20. Photo: Drew Angerer/Getty Images

President Trump on Friday evening commuted the sentence of his longtime associate Roger Stone, according to two senior administration officials. Stone in February was sentenced to 40 months in prison for crimes including obstruction, witness tampering and making false statements to Congress.

Why it matters: The controversial move brings an abrupt end to the possibility of Stone spending time behind bars. He had been scheduled to report to prison on July 14.

Updated 7 hours ago - Health

Which states have set single-day coronavirus records this week

Data: COVID Tracking Project and state health department data compiled by Axios; Map: Danielle Alberti and Naema Ahmed/Axios

13 states this week surpassed records set just last week for their highest number of coronavirus infections in a single day, according to the COVID Tracking Project and state health department data. 16 states in total reported new highs.

The big picture: The United States' alarming rise in coronavirus cases isn't just due to increased testing — particularly where the number of cases has grown fastest over the last month, Axios' Andrew Witherspoon and Caitlin Owens report.

Updated 7 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 6:30 p.m. ET: 12,389,660 — Total deaths: 557,279 — Total recoveries — 6,830,596Map.
  2. U.S.: Total confirmed cases as of 6:30 p.m. ET: 3,169,611 — Total deaths: 133,885 — Total recoveries: 983,185 — Total tested: 38,856,341Map.
  3. Public health: The reality of the coronavirus bites.
  4. Trade: Trump says he's no longer considering phase-two trade deal with China because the pandemic damaged the two countries' relationship.
  5. 🎧 Podcast: Rural America has its own coronavirus problem.