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Illustration: Aïda Amer/Axios

Tesla CEO Elon Musk is banking on a risky new strategy for the electric automaker: a robotaxi service that he argues will transform Tesla into a $500 billion company.

The big picture: Like other AV companies, Musk is fixated on a potential $3 trillion market opportunity for autonomous mobility as a service.

  • But while most say fully self-driving cars are still a decade away, Musk is telling investors they'll be here by next year and that Tesla will have first mover advantage with a million robotaxis on the road.

Between the lines: Investors are eager to fund his plans — witness last week's fresh $2.7 billion equity and bond deal.

  • Musk's track record is spotty, though — even he admits to blowing his self-imposed timetables — but in the end, he insists, "I get it done."
  • Still, his latest idea — for Tesla owners to rent out their cars via a vast Tesla robotaxi network — seems "half baked," as Cowen analyst Jeffrey Osborne put it to CNBC.

Driving the news: Musk touted the Tesla car-sharing network at an investor event on April 22.

  • Then, according to CNBC and Bloomberg, he doubled down a week later on a private investor call, saying AVs are now the fundamental driver of value for Tesla and making his case for that $500 billion market cap.

How it will work, according to Musk:

  • Tesla owners can offer their cars for rent on Tesla's car-sharing network.
  • They could pocket up to $30,000 a year (Tesla would keep 25% to 30% ) and their cars will rise in value — up to $250,000 within 3 years, Musk claims — as more self-driving capabilities are added via software updates.
  • Tesla would supplement the fleet with company-owned cars as needed.

Yes, but: The economics of the plan seem dubious and there are a host of serious legal, logistical and technology questions that remain unanswered.

  • Tesla says it made a technological leap by replacing a Nvidia processor with a new proprietary AV computer chip, which will enable self-driving capabilities starting in 2020.
  • "I feel very confident predicting autonomous robotaxis from Tesla next year. Not everywhere. But we will have regulatory approval somewhere," Musk says.
  • But there are no federal regulations on AVs and no prescribed validation methods, so states are still trying to figure out how to govern self-driving cars.

What they're saying:

  • The new focus on autonomy could push out the path to profitability even further, Barclays analyst Brian Johnson wrote in a research note Tuesday.
  • Patient investors will be rewarded, ARK Invest analyst Tasha Keeney tells Axios. "It's not too wild to say the company be worth $500 billion in the next 5 years."
  • "Let's count how many truly autonomous (no human safety driver) Tesla taxis (public chooses destination & pays) on regular streets (unrestricted human driven cars on the same streets) on December 31, 2020. It will not be a million. My prediction: zero. Count & retweet this then," tweeted robotics pioneer Rodney Brooks.

My thought bubble: Tesla's strategy is far-fetched, but plausible, if, as Osborne says, they are better than GM at manufacturing, better than Nvidia at hardware, better than Google at software, and better than Uber at running a taxi service. That's a lot of ifs.

Go deeper: Teslas are among the most popular cars rented on Turo

Go deeper

Updated 5 hours ago - Politics & Policy

Arizona GOP's private recount of 2020 election confirms Biden's win

Contractors working on behalf of the GOP examine and recount 2020 ballots at Arizona Veterans Memorial Coliseum in Phoenix in May. Photo: Courtney Pedroza/Getty Images

In an odd coda to the 2020 election, private contractors conducting a GOP-commissioned recount in Arizona confirmed President Biden’s win in Maricopa County.

Why it matters: The unofficial, party-driven recount has been heavily covered on cable news as part of former President Trump's continued effort to sow doubt about the election result.

Del Rio bridge camp empty following Haitian migrant surge

A boy bathes himself in a jug of water inside a migrant camp at the U.S.-Mexico border on Sept. 21 in Del Rio, Texas. Photo: John Moore/Getty Images

The last migrants camping under the Del Rio International Bridge, which connects Texas and Mexico, departed on Friday, Homeland Security Secretary Alejandro Mayorkas announced during a White House press briefing.

Driving the news: Thousands of migrants, mostly from Haiti, had arrived to the makeshift camp after crossing the southern border seeking asylum. Roughly 1,800 migrants will now head to U.S. Customs and Border Protection processing centers.

White House says it expects federal contractors to be vaccinated by Dec. 8

Photo: Stefani Reynolds/Bloomberg via Getty Images

The White House said in new guidance Friday that it expects millions of federal contractors to be vaccinated against the coronavirus no later than Dec. 8.

Why it matters: Companies with federal contractors have been waiting for formal guidance from the White House before requiring those employees to get vaccinated, according to Reuters.

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