Gene Munster: Tesla Could Add Billions In Revenue With Ride-Sharing

Tesla Inc TSLA is still ironing out the kinks in its Model 3 production, but at least one observer says one of the company’s biggest long-term opportunities has nothing to do with selling cars.

The chance of Tesla operating its own fleet of self-driving ride-sharing vehicles by 2023 is greater than 50 percent, Loup Ventures managing partner Gene Munster said in a Wednesday note. 

A 'Substantial Advantage' Over Ride-Share Competitors

Tesla’s fleet could add between $2 billion and $6 billion in annual high-margin revenue by that time, Munster said.

Tesla owners would also likely be allowed to add their vehicles to Tesla’s fleet on a part-time basis, similar to the system used by  Uber. Loup Vetures estimates Tesla owners could earn nearly $6,900 annually by participating in the ride-sharing fleet.

While Munster does not anticipate that Tesla can take a majority of the U.S. ride-sharing business, he said Tesla could reach 4 to 10 percent market share by 2023.

“If several key obstacles are overcome, most notably achieving autonomy, Tesla will have a handful of substantial advantages over competitors in the space,” said the former Piper Jaffray analyst. 

Trailing The Motor City?

If Tesla does launch a self-driving ride-sharing service by 2023, it will likely be four years behind competitor General Motors Company GM, which recently said it plans to launch its own fleet of self-driving cars in 2019.

Earlier this year, Navigant Research said Tesla is dead last in the autonomous vehicle technology race among 19 companies developing the technology. Navigant said GM and Waymo, the auto unit of Alphabet Inc GOOG GOOGL, are currently leading the race.

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