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Apple, Waymo, and even Amazon will have a huge advantage against Tesla in the race to launch self-driving taxis, one Wall Street analyst says

Apple, Waymo, and even Amazon will have a huge advantage against Tesla in the race to launch self-driving taxis, one Wall Street analyst says

The Morgan Stanley auto analyst Adam Jonas told Business Insider that major tech companies like Alphabet , Apple , and Amazon would have an advantage over Tesla if they decided to operate self-driving-taxi services.

Each could use its profits to offer a new service at a lower price than competitors to gain market share and drive out rivals.

Tesla , on the other hand, has produced widening losses in the past two years and has over $3 billion in debt due through the end of 2021.

If Tesla wants to run a successful autonomous-ride-hailing service, the service will have to be profitable at some point, Jonas said.

In the coming years, Tesla plans to launch an autonomous-mobility service, called the Tesla Network , that combines ride-hailing and car-sharing.

While CEO Elon Musk has touted the Tesla Network as an opportunity for Tesla owners to make money from their vehicles when they aren’t using them, the Morgan Stanley auto analyst Adam Jonas told Business Insider that peer-to-peer car sharing would be a small percentage of the network.

Jonas said he thought Tesla would instead start an autonomous-ride-hailing service with a fleet of company-owned vehicles. Big tech companies can offer new services at a loss

In a 2017 study , Intel and Strategy Analytics projected that the global market for autonomous-driving technology would be worth $7 trillion in 2050. That’s why auto and tech companies are spending billions to develop self-driving-car systems.Jonas said major tech companies like Alphabet (which owns the autonomous-driving company Waymo), Apple (which is developing self-driving-car technology ), and Amazon (which has formed a team to explore possible uses of autonomous-driving tech) would have a big advantage over Tesla if they launched self-driving-taxi services because they could run such an operation at a loss.Alphabet and […]

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