Phron Weekly #5: Tesla's 'Cybercab' and Market Sizing

Hi Everyone!

Welcome to the fifth edition of Phron Weekly! This week's review explores attachment and Elon's new 'Cybercab.'

Reflections and Growth

I came across this week's quote on Instagram, which was misquoted. I could not find the author of this phrase, but the best explanation is that this quote is a paraphrase of Buddha's teachings. This quote speaks to attachment. Attachment is a perception that we have possession or control over something. Nothing in life is permanent, and clinging to our desires and possessions ultimately leads to suffering.

Life becomes lighter when we let go of the feeling that we have something to lose. Once you let go, you have the space to experience what life has to offer.

Your Next Move

This week, consider what you are afraid of losing. How does this fear function in your life?

Business Insights

Tesla's “Cybercab” and Market Sizing

Last week, Tesla announced details about its new “Cybercab,” a robotaxi with no driver, steering wheels, or pedals — just four wheels, cameras, and AI. These vehicles are likely to start production before 2027 and be available for consumers to purchase for less than $30,000. The operating cost of these taxis is estimated to be $0.20 per mile.

What I found interesting was the Financial Times' rough market size estimate of the robotaxi market. Americans drive about 3 trillion miles a year. Assuming 10% of that travel shifts to robotaxis and consumers pay $1 per mile, there is $300 billion in yearly revenue. With a 50% operating margin, valued at 15 times operating profit, the result is a more than $2 trillion market.

Market sizing estimates are an exercise in predicting a business's potential. To conduct them, assumptions are necessary. Despite heavy assumptions and guesses, market estimates can provide a starting point for evaluating a new business. The estimate above calculated the quantity (how many miles of robotaxi per year) and price (consumer cost per mile) to determine the yearly revenue of the robotaxi market.

Some action steps for you:

• Use market sizing when assessing the potential scope of a target market

Here are some links for you to:

• Consulting Market Sizing
• Reuters on 'Cybercab'
• Financial Times on 'Cybercab' (Subscription Required)

Side note: Elon mentioned inductive charging (aka wireless charging) for the cybercab, which I find neat.

Fun Fact: Did you know that bees can recognize human faces? In 2004, researchers at Cambridge conducted a study where bees learned to associate faces with a honey reward.

Disclaimer: The content of this newsletter is for informational purposes only and does not constitute professional advice.