#435: What Do We Think Of Tesla’s Cybercab?
1. What Do We Think Of Tesla’s Cybercab?
Last week, Tesla held its We, Robot event at the Warner Bros. Studio in Los Angeles.1 In addition to introducing a range of new products, including Robovan, Cybercab, and a wireless charging platform, the We, Robot event gave guests an opportunity to take driverless test rides in Cybercabs and autonomous Model Y vehicles.
Though helpful to its scaling efforts, the Cybercab should not be a prerequisite for Tesla’s robotaxi platform, as all cars equipped with Hardware 3 and 4 will be capable of full autonomy with over-the-air software updates. With Models 3 and Y, Tesla aims to launch unsupervised Full Self-Driving (FSD) in California and Texas next year. According to our research, Tesla is likely to launch a full-scale robotaxi network in 2025 or 2026.2
Tesla also plans to sell the Cybercab to consumers and could incentivize third parties to establish robotaxi fleet businesses. While Tesla could operate its own fleet, third party operators are likely to own the majority of robotaxi fleets.
Among the significant takeaways from We, Robot, Elon Musk announced that Tesla is likely to offer robotaxi rides for as low as $0.30-$0.40 cents per mile at scale, not far from ARK’s research at ~$0.25 cents at scale.3 For comparison, the average cost per ride-hailing mile in Western ride-hailing markets is ~$2,4 compared to that for a personally owned vehicle at ~$0.70 cents per mile.5 Lower costs should make robotaxis extremely competitive with human-driven ride-hail platforms, attracting a much larger user base. Indeed, our research suggests that Tesla is targeting a market much larger than that of Uber and Didi, over $10 trillion globally.
Tesla's stock traded down after its robotaxi debut, perhaps because many investors were anticipating more near-term milestones and FSD timelines. Measured in his remarks, Elon revised his launch date for unsupervised FSD from as early as this year to 2025 into 2026. In our view, Tesla's extensive data lake, sourced from customer vehicles, has given it a significant edge over competitors like Waymo which lack data scale and manufacturing capacity. While Tesla wasn’t the first to launch an autonomous platform, our research suggests that it is likely to be the first to scale.
2. Trump-Linked World Liberty Financial Aims To Raise $300 Million For A New DeFi Lending Platform
After months of speculation, a new DeFi platform closely associated with presidential candidate Donald Trump has been announced. Trump family members have galvanized other media in releasing promotional X posts about the project. The new DeFi platform aims to raise $300M at a $1.5B valuation6 through the sale of the WLFI token.
Within a month of the presidential election, many in the crypto industry are skeptical about the timing and substance of Trump’s venture. That said, to date a reputable venture capital partner and Scroll’s co-founders have engaged with the platform by participating as advisors.
In the absence of technical documentation, several aspects of the project are known. With an SEC exemption, the token will be offered under Rule 506(c) of SEC Regulation D, allowing the sale of an unregistered security to accredited investors in the US and qualified investors in the UK. Approximately 62% of the tokens will be sold, with 18% allocated to expansion and growth initiatives and 20% allocated to the team, advisors, and future hires.7
The protocol will utilize Aave V3 instance on the Ethereum mainnet to create borrowing and lending markets for ETH, WBTC, USDC, and USDT. The collaboration with Aave is significant, as 20% of the protocol’s interest will be allocated8 to the Aave DAO, as well as 7% of the WLFI tokens.9 While the protocol's initial functionalities will align with those of Aave, the team plans to expand by onboarding more exotic assets tied to traditional finance and institutional investments, validating the creation of its own protocol.
The project will evolve in multiple phases. Once in place, the second phase will deploy the protocol on Ethereum’s layer 2 network called Scroll, while the third and final phases will focus on integration with exchanges, on/off-ramp solutions, and stablecoin-powered credit cards.
While the initial reaction to Aave DAO’s proposal10 was positive, fundraising will be key to gauging investor appetite and assessing the project’s viability.
3. The Stablecoin Supply Ratio Oscillator Is “Oversold”
In early September, the stablecoin supply ratio oscillator (SSRO), a metric used to assess bitcoin’s potential purchasing power, became extremely “oversold” (-2.27), hitting lows last seen near the bottom of the bear market in 2022, as shown below.
The Stablecoin Supply Ratio Oscillator is calculated in three steps. First, divide supply of bitcoin by the supply of all major stablecoins (denominated in BTC). Second, trace the ratio’s 200-day moving average, plus 2 standard deviations above and below. The SSRO tracks how the ratio moves between those two standard deviation bands (a.k.a., Bollinger bands).
We believe these oversold conditions give good reason for optimism in bitcoin’s price, after the establishment of two higher local lows seen at $52,530 on September 6th and at $58,863 on October 10th—potentially indicating that an uptrend is developing in the asset’s market structure.
Important Information Regarding Bitcoin
Bitcoin is a relatively new asset class, and the market for bitcoin is subject to rapid changes and uncertainty. Bitcoin is largely unregulated and bitcoin investments may be more susceptible to fraud and manipulation than more regulated investments. Bitcoin is subject to unique and substantial risks, including significant price volatility and lack of liquidity, and theft. There is no assurance that bitcoin will maintain its value over the long term.
ARK strongly encourages any investor considering an investment in bitcoin or any other digital asset to consult with a financial professional before investing. All statements made regarding bitcoin and other digital assets are strictly beliefs and points of view held by ARK and are not recommendations by ARK to buy, sell or hold bitcoin or any other digital asset. Historical results are not indications of future results.
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1
Tesla. 2024. We. Robot. Broadcast.” X.
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2
Keeney, T. et al. 2024. “ARK’s Expected Value For Tesla In 2029: $2,600 Per Share.” ARK Investment Management LLC.
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3
ARK Investment Management. 2024. “Big Ideas 2024: Disrupting the Norm, Defining the Future.”
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4
The market served by Uber, for example. See Grauer, J. 2023. “How much does Uber cost per mile?”
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5
This ARK analysis is based on a range of sources, including Moye, B. 2024. “AAA Your Driving Costs: The Price of New Car Ownership Continues to Climb”; and others, which may be provided upon request.
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6
Kuhn, D. 2024. “Trump-connected World Liberty Financial formally proposes launching on Aave's Ethereum mainnet instance.” The Block.
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7
Lutz, N. 2024. “Donald Trump Launches World Liberty Financial, Team Unveils Token Details.” Decrypt.
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8
Ibid.
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9
WBTC: WBTC stands for Wrapped bitcoin and it is a tokenized version of the native Bitcoin asset running on the Ethereum Blockchain. USDC: USDC is a stablecoin pegged to the US dollar minted and managed by Circle. USDT: USDT is a stablecoin pegged to the US dollar minted and managed by Tether. DAO: DAO stands for decentralized autonomous organization, it is a blockchain based organization that is operated by smart contracts and governed by a set of participants in a decentralized and distributed manner. WLFI: WFLI is the ticker of the token for the World Liberty Financial project.
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10
WorldLibertyFi. 2024. “World Liberty Financial Aave v3 Instance on Ethereum Mainnet Proposal.”