Short Seller Jim Chanos Slams Tesla Robotaxi Economics As 'Ridiculous,' Citing Dead Miles, Insurance Costs And Cleaning Expenses

Prominent short seller Jim Chanos criticized Tesla Inc.‘s TSLA robotaxi economic projections on Monday, calling the figures “ridiculous” and pointing to several overlooked cost factors.

What Happened: Chanos, responding to a Tesla investor’s profit calculations on X, highlighted that “roughly half of all ride-hailing miles are ‘dead’ (non-revenue) miles.” He also noted commercial auto insurance costs “3- 4x personal auto insurance” at approximately “30-40 cents per mile,” with additional expenses for cleaning at $400 per month.

Chanos argued that the major cost for a Robotaxi fleet would be redundancy, safety, and monitoring, which the Massachusetts Institute of Technology has estimated could range from $0.05 to $2.35 per mile, depending on regulations. He also questioned the viability of Tesla’s projections by pointing out that the entire U.S. taxi and ridesharing market is expected to be valued at $50 billion to $75 billion in 2024.

When challenged about potential higher revenue, Chanos expressed doubt, citing consumers’ ability to “operate their own vehicles at a marginal cost of 50-60 cents per mile” and noting that “commoditized service markets tend to converge revenues to marginal cost.”

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Why It Matters: Tesla has been preparing for its limited robotaxi launch in Austin this June, with CEO Elon Musk announcing plans to deploy only 10-20 vehicles initially. The company has already launched an employee-only autonomous ride-hailing service in Austin and San Francisco, completing over 1,500 trips covering 15,000 miles.

Investor Gary Black recently described the upcoming launch as “an experiment” rather than a true market test, citing the limited deployment and “asymmetry of risks.” Former Waymo CEO John Krafcik has also questioned Tesla’s readiness for autonomous taxi operations.

Despite skepticism, Tesla has intensified testing efforts with approximately 300 drivers in Austin under “Project Rodeo,” while collaborating with local emergency services and developing its robotaxi app for the planned June 1 launch.

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