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How Tesla’s ridesharing network could disrupt the airline industry
The auto industry is changing. Autonomous and electric cars are becoming more available sooner than many people think. This will become even more prevalent once Tesla delivers upwards of 500k to 1 million self-driving vehicles per year by the end of the decade. But this change from gas-powered cars to a world powered by battery electric vehicles won’t be isolated to the auto industry. It will likely affect other sectors, including the airline industry.
Disrupting the Airline Industry
As advances in the auto industry make traveling by car more attractive, airlines will have to adjust to the steeper competition. Short haul flights, flights less than 300 miles, will be most significantly affected. Short haul flights cost an average of $120 above the cost of driving, and reduces door-to-door travel time by roughly an hour. These types of city to nearby city flights make up 25% of all US domestic departures.
According to a new Morgan Stanley study, if demand for short haul flights completely disappeared, it would lead to about a 15% loss in earnings. The study also acknowledged that such a change would take at least five to ten years, giving the airline industry time to adjust.
Modern Car Travel
Even without Tesla’s ridesharing network, widespread adoption of electric cars and existing ridesharing services are making people reconsider their reasons for traveling by plane. Services such as Uber and Lyft are more cost effective than flying, and oftentimes more convenient due to the ease of scheduling a ride and with more range of options available. Travelers sacrifice the shorter travel time of a flight, but the difference is oftentimes not too significant.
Southern California-based Tesla-only intercity shuttle service, Tesloop, currently provides transportation service between Los Angeles, Las Vegas and Palm Springs, and will be looking to expand its operations into new markets. The drivers, which the company refers to as “pilots”, transport passengers using Tesla Autopilot. And like the experience in an airplane, Tesloop provides snacks, water and Wi-Fi to its passengers. Why is this important? By replicating the experience of airline travel, while doing so at lesser cost than a traditional short haul flight, Tesloop presents a compelling reason to use ground transportation and forego vehicle ownership.
The Future of Car Travel
Ridesharing, autonomous cars and electric cars are three trends that are not going away any time soon. In fact, they will likely continue to become more commonplace and alter the way we live in meaningful ways.
As technology continues to advance, the comfort, flexibility and reliability of ridesharing, electric cars and autonomous cars will increase as the cost decreases. This will make them more attractive to travelers and further threaten airlines.
In the future, new forms of automobile travel will begin to improve in the areas where flying currently has an advantage. Autonomous cars will make traveling on the roads safer for everyone. Once human error is taken out of the equation, speed limits will likely be increased, lessening the time advantage flying currently has over driving.
Tesla’s free long distance travel for life Supercharging model combined with advances in Autopilot and self-driving technology, plus ridesharing, are already altering the way we think about travel, and their impact on other industries will only increase with time. New technologies bring about change. New ideas create new opportunities in economies and in our way of life.
The advancements will likely disrupt many industries that exist today, including the airline industry. Airlines will have to adjust to the changes — but who knows? Maybe one day autonomous and electric planes (or flying cars) will disrupt the autonomous electric car ridesharing economy.
News
Tesla Model Y Standard Long Range RWD launches in Europe
The update was announced by Tesla Europe & Middle East in a post on its official social media account on X.
Tesla has expanded the Model Y lineup in Europe with the introduction of the Standard Long Range RWD variant, which offers an impressive 657 km of WLTP range.
The update was announced by Tesla Europe & Middle East in a post on its official social media account on X.
Model Y Standard Long Range RWD Details
Tesla Europe & Middle East highlighted some of the Model Y Standard Long Range RWD’s most notable specs, from its 657 km of WLTP range to its 2,118 liters of cargo volume. More importantly, Tesla also noted that the newly released variant only consumes 12.7 kWh per 100 km, making it the most efficient Model Y to date.
The Model Y Standard provides a lower entry point for consumers who wish to enter the Tesla ecosystem at the lowest possible price. While the Model 3 Standard is still more affordable, some consumers might prefer the Model Y Standard due to its larger size and crossover form factor. The fact that the Model Y Standard is equipped with Tesla’s AI4 computer also makes it ready for FSD’s eventual rollout to the region.
Top Gear’s Model Y Standard review
Top Gear‘s recent review of the Tesla Model Y Standard highlighted some of the vehicle’s most notable features, such as its impressive real-world range, stellar infotainment system, and spacious interior. As per the publication, the Model Y Standard still retains a lot of what makes Tesla’s vehicles well-rounded, even if it’s been equipped with a simplified interior.
Top Gear compared the Model Y Standard to its rivals in the same segment. “The introduction of the Standard trim brings the Model Y in line with the entry price of most of its closest competition. In fact, it’s actually cheaper than a Peugeot e-3008 and costs £5k less than an entry-level Audi Q4 e-tron. It also makes the Ford Mustang Mach-E look a little short with its higher entry price and worse range,” the publication wrote.
Elon Musk
Elon Musk’s xAI bets $20B on Mississippi with 2GW AI data center project
The project is expected to create hundreds of permanent jobs, dramatically expand xAI’s computing capacity, and further cement the Mid-South as a growing hub for AI infrastructure.
Elon Musk’s xAI plans to pour more than $20 billion into a massive new data center campus in Southaven, Mississippi, marking the largest single economic development project in the state’s history.
The project is expected to create hundreds of permanent jobs, dramatically expand xAI’s computing capacity, and further cement the Mid-South as a growing hub for AI infrastructure.
xAI goes MACROHARDRR in Mississippi
xAI has acquired and is retrofitting an existing facility in Southaven to serve as a new data center, which will be known as “MACROHARDRR.” The site sits near a recently acquired power plant and close to one of xAI’s existing data centers in Tennessee, creating a regional cluster designed to support large-scale AI training and inference.
Once completed, the Southaven facility is expected to push the company’s total computing capacity to nearly 2 GW, placing it among the most powerful AI compute installations globally. The data center is scheduled to begin operations in February 2026.
Gov. Tate Reeves shared his optimism about the project in a press release. “This record-shattering $20 billion investment is an amazing start to what is sure to be another incredible year for economic development in Mississippi. Today, Elon Musk is bringing xAI to DeSoto County, a project that will transform the region and bring amazing opportunities to its residents for generations. This is the largest economic development project in Mississippi’s history,” he said.
xAI’s broader AI ambitions
To secure the investment, the Mississippi Development Authority approved xAI for its Data Center Incentive program, which provides sales and use tax exemptions on eligible computing hardware and software. The City of Southaven and DeSoto County are also supporting the project through fee-in-lieu agreements aimed at accelerating development timelines and reducing upfront costs.
Founded in 2023 by Elon Musk, xAI develops advanced artificial intelligence systems focused on large-scale reasoning and generative applications. Its flagship product, Grok, is integrated with the social media platform X, alongside a growing suite of APIs for image generation, voice, and autonomous agents, including offerings tailored for government use.
Elon Musk highlighted xAi’s growth and momentum in a comment about the matter. “xAI is scaling at an immeasurable pace — we are building our third massive data center in the greater Memphis area. MACROHARDRR pushes our Colossus training compute to ~2GW – by far the most powerful AI system on Earth. This is insane execution speed by xAI and the state of Mississippi. We are grateful to Governor Reeves for his support of building xAI at warp speed,” Musk said.
Tesla’s Head of AI, Ashok Elluswamy, says that something that was expected with version 14.3 of the company’s Full Self-Driving platform has already partially shipped with the current build of version 14.2.
Tesla and CEO Elon Musk have teased on several occasions that reasoning will be a big piece of future Full Self-Driving builds, helping bring forth the “sentient” narrative that the company has pushed for these more advanced FSD versions.
Back in October on the Q3 Earnings Call, Musk said:
“With reasoning, it’s literally going to think about which parking spot to pick. It’ll drop you off at the entrance of the store, then go find a parking spot. It’s going to spot empty spots much better than a human. It’s going to use reasoning to solve things.”
Musk said in the same month:
“By v14.3, your car will feel like it is sentient.”
Amazingly, Tesla Full Self-Driving v14.2.2.2, which is the most recent iteration released, is very close to this sentient feeling. However, there are more things that need to be improved, and logic appears to be in the future plans to help with decision-making in general, alongside other refinements and features.
On Thursday evening, Elluswamy revealed that some of the reasoning features have already been rolled out, confirming that it has been added to navigation route changes during construction, as well as with parking options.
He added that “more and more reasoning will ship in Q1.”
🚨 Tesla’s Ashok Elluswamy reveals Nav decisions when encountering construction and parking options contain “some elements of reasoning”
More uses of reasoning will be shipped later this quarter, a big tidbit of info as we wait v14.3 https://t.co/jty8llgsKM
— TESLARATI (@Teslarati) January 9, 2026
Interestingly, parking improvements were hinted at being added in the initial rollout of v14.2 several months ago. These had not rolled out to vehicles quite yet, as they were listed under the future improvements portion of the release notes, but it appears things have already started to make their way to cars in a limited fashion.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
As reasoning is more involved in more of the Full Self-Driving suite, it is likely we will see cars make better decisions in terms of routing and navigation, which is a big complaint of many owners (including me).
Additionally, the operation as a whole should be smoother and more comfortable to owners, which is hard to believe considering how good it is already. Nevertheless, there are absolutely improvements that need to be made before Tesla can introduce completely unsupervised FSD.
Tesla Model Y Standard Long Range RWD launches in Europe
Elon Musk’s xAI bets $20B on Mississippi with 2GW AI data center project
