Robotaxis are emerging onto public roads, and they’re widely expected to have a substantial impact on dealerships, service, and the industry as a whole.
It’s common to hear Tesla $TSLA ( ▼ 1.2% ) bulls discuss futures in which owners and dealers can passively run driverless ride-hailing businesses while their personal or for-sale vehicles aren’t in use. However, whether this will come as a net positive or negative for existing service centers is still up for debate.
Driving the news: Alex Lawrence, who is the CEO of electric-only dealership EV Auto, predicts that this future will actually result in fewer service opportunities for dealers, rather than more.
Vehicles drive more miles, requiring more regular replacements of parts such as tires and brake pads, but Lawrence argues that Tesla’s own service department will eat up service market share with in-house autonomy.
"Why would you have it drive to you and then go take it to the Ford dealer to put tires on for you, or the tire shop? Especially with Tesla, who's probably going to undercut their prices and you can get tires cheaper, it'll just drive to their service center, they'll do the tires, and it'll drive back," Lawrence told Daily Dealer Live hosts Sam D'Arc and Yossi Levi.
Why it matters: If dealerships get ahead of this trend by providing additional options for consumers and fleet owners that OEMs can’t, then they may be able to stave off a loss of market share to Tesla’s robotaxi service program. Still, Lawrence even expects his own EV service program to take a hit as robotaxis become more ubiquitous, especially if consumers shift away from ownership toward a rental model like Turo, Airbnb, or Uber.
“I'm in the EV only business and the EV service business, and I don't think I'm going to get a ton of new business from robotaxi folks. I'd love to be wrong, but on the dealer side, there’s this whole idea of replacing people that don't want to own cars, they just essentially want to rent cars.”
For context: Tesla launched its first driverless ride-hailing pilots in Austin over the weekend, complete with a backup safety operator in the car. Meanwhile, Alphabet-owned firm Waymo says it’s already operating over 250,000 paid driverless rides per week, across four cities and 1,500 vehicles.
What’s next: The robotaxi industry is still emerging. Service centers that can get ahead of the public adoption curve should be able to take advantage of that by bolstering their EV programs and maximizing their offerings. But keeping an eye on Tesla’s robotaxi service program will also be crucial in the years to come, and it may require dealers to make major changes to their own service approach.
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