Tesla is taking direct aim at Uber and Lyft with plans to roll out 1 million robotaxis by next year

elon muskTesla CEO Elon Musk pauses while speaking before unveiling the Model Y at the company's design studio Thursday, March 14, 2019, in Hawthorne, Calif.AP Photo/Jae C. Hong

  • On Monday, Tesla CEO Elon Musk revealed the company's plans to compete with incumbents like Uber and Lyft by using an autonomous ride-sharing fleet, which will be made up of what Musk described as robotaxis.
  • These robotaxis will operate on the Tesla Network, which is basically a ride-hailing platform.
  • Robotaxis can be essentially any Tesla vehicle with autonomous driving functionality.
  • Musk said that by "next year for sure, we will have over 1 million robotaxis on the road."
  • Robotaxi's will be significantly cheaper for riders than what Uber and Lyft cost today, Musk said, and will offer Tesla owners the opportunity of making upwards of $30,000 per year.
  • "The fundamental message that consumers should be taking today is that it is financially insane to buy anything other than a Tesla," Musk said.
  • Visit BusinessInsider.com for more stories.

Tesla is all-in on its plans to take over the ride-sharing industry.

On Monday, CEO Elon Musk revealed the company's plans to compete with incumbents like Uber and Lyft with the company's strategy for an autonomous ride-sharing fleet.

Robotaxis are essentially any Tesla vehicle with autonomous driving functionality. To turn a Tesla into a robotaxi, a car's owner simply adds it to the Tesla Network platform by way of the company's app.

Musk said that by "next year for sure, we will have over 1 million robotaxis on the road."

TeslaBusiness Insider / Screenshot

Read more: Tesla unveils the 'best chip in the world' for self-driving cars at its autonomy day event

Riders will be able to summon a robotaxi via the same Tesla app - similarly to how they call for an Uber or Lyft today. The key difference, of course, is that there won't be a driver in the car.

Musk acknowledged the regulatory limitations and that not all regions will openly approve the company's futuristic tech right away. Still, Tesla's chief exec said he's "very confident" in predicting the launch of the robotaxi program by next year in certain parts of the US.

Musk also predicts rides via robotaxis will cost significantly less. The average cost for a ride-share today is around $2-$3 per mile, he said, whereas Tesla's program will likely come out to be less than $0.18.

For Tesla owners, there's significant money to be made as well, Musk said. A single robotaxis could provide around $30,000 worth of profits per year, and over a couple hundred thousand dollars over the lifespan of the vehicle, he said.

"The fundamental message that consumers should be taking today is that it is financially insane to buy anything other than a Tesla," Musk said. "It will be like owning a horse in three years. I mean, fine if you want to own a horse. But you should go into it with that expectation."

TeslaBusiness Insider / Screenshot

Tesla's "Autonomous Day" comes just two days before the company's earnings call, which some on Wall Street called a move to distract investors from a weak first-quarter. Also, the robotaxi announcement comes amid Lyft's public market debut at the end of March and Uber's expected IPO sometime in May.

Get the latest Tesla stock price here.

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