In his Master Plan, Part Deux, Elon Musk described a future populated by Tesla electric cars capable of driving themselves. In his scenario, Musk noted that the vehicles would be able to travel from point to point without human input, forming a network of electric cars that can essentially pay for themselves through ride-sharing. Today, Tesla appears to have taken a step towards this goal, by making Enhanced Autopilot standard for all Model 3 orders in China.
Having the driver-assist suite standard for Model 3 buyers makes sense from a business perspective. As the company looks to maintain consecutive profitable quarters while working to secure its position as a top seller in the world’s largest electric vehicle market, China, Tesla will need to entice buyers with a vehicle that has both an affordable price point and market differentiators that cannot be easily replicated. Autopilot data.
Having Data Will Sell Cars
Beyond the intention of pushing more Model 3 sales in China, Tesla’s standard offering of Enhanced Autopilot in the country bodes well for the company’s development and eventual release of its Full Self-Driving (FSD) suite.
It’s important to note that outside of China, Tesla has collected over 1 billion miles of Autopilot data from its customers, which has allowed the company to maintain a competitive edge over other automakers by creating a vast network of roadway and real-world driving data. This data can be seen as a major pillar for the evolution of Autopilot features. Features such as Navigate on Autopilot, which debuted on the highly-anticipated Software Version 9 last year, was as a notable step towards autonomous driving. Tesla’s AI Director, Andrej Karpathy, noted in last year’s third-quarter earnings call that they were able to train large neural networks and continue to refine the accuracy and precision of Autopilot decisions.
By including Enhanced Autopilot as a standard feature in China, Tesla will be able to traverse this very same tried-and-true path of having its customers build a network of driving data in a new market, but on a much quicker timeframe and larger scale via Model 3. Not only does it pave the way for FSD development, but the immediate value Autopilot provides to Tesla Model 3 buyers, in the form of having a compelling feature that isn’t readily available on competing electric cars, and at no cost, will arguably be one of its major selling points. A selling point now that will also pay dividends later as Enhanced Autopilot matures in the local market and its value spreads by word of mouth from satisfied drivers.
It should be noted that Tesla’s Enhanced Autopilot and Full Self-Driving system are not synonymous, the former corresponding to a set of non-autonomous driver-assist features and the latter referring to a Level 5-capable autonomous suite of features. Tesla has been aiming to roll out the first features of its FSD system, and Elon Musk has progressively gotten more excited about the impending release of autonomous capabilities’ to Tesla’s electric cars. During the fourth quarter earnings call, for example, Musk noted that Tesla has an edge over other companies pursuing self-driving technologies due to its real-world driving data.
“(Autonomy) has the potential to save millions of lives, tens of millions of serious public injuries and give people their time back, so that they don’t have to drive, they can — if you’re on the road, you can spend time doing things that you enjoy instead of being in terrible traffic. So it’s extremely important. We feel confident about our technical strategy, and I think we have an advantage that no one else has, which is, that we have, at this point, somewhere in the order of 300,000 vehicles on the road, with a 360-degree camera sensor suite, radar, ultrasonics, always connected uploads, especially video clips with the customer submission when there is intervention. So effectively, we have a massive, massive training fleet,” Musk said.
Towards Full Autonomy and (More) Safety
One thing that Tesla and Elon Musk has emphasized over the years is that systems like Autopilot and future capabilities like Full Self-Driving are not just put in place for convenience. While such systems make driving easier, both Autopilot and autonomous driving are considered by Tesla as ways to make driving safer. Tesla emphasized this point in the results of its quarterly vehicle safety reports. In Q4 2018 alone, Tesla recorded one accident for every 2.91 million miles driven with Autopilot engaged, despite the season being prone to untoward incidents on the road due to winter. By comparison, the NHTSA’s data points to an automobile crash every 436,000 miles. It should be noted that these figures are true for Autopilot only.
Tesla is currently pushing for the development and rollout of its Full Self-Driving features. The company is working on a custom chip that can help enable autonomous driving capabilities. In the Q3 2018 earnings call, AI Director Andrej Karpathy mentioned that the company had trained large neural networks that work very well on the road, though deployment was not possible yet due to computational restraints. These restraints are expected to be fully addressed once Tesla starts releasing Hardware 3, which is estimated to be rolled out this year. Elon Musk notes that he expects Full Self-Driving to be safe for use towards the end of 2019.
One can argue that the Chinese market could eventually pave the way for FSD’s eventual release. With China perhaps having less stringent rules in place for the use of self-driving vehicles, it’s not out of the question to see Tesla roll out the next-generation of Autopilot in China first. In this scenario, the offering of Enhanced Autopilot as a standard feature to Model 3 buyers overseas can be seen as a hedge by the California-based automaker, in the event US regulatory approvals to release Full-Self Driving comes to a halt.
Once Full Self-Driving is on the roads, it is not difficult to imagine Tesla being able to make a stronger case for its safety benefits to lawmakers and customers. By this time, it would also make sense for Tesla to offer Enhanced Autopilot as standard in its vehicles. In this scenario, Tesla could enable Autopilot’s basic capabilities in all cars such as Traffic-Aware Cruise Control and Autosteer, while charging a premium to access advanced features like a more robust Navigate on Autopilot and actual Full Self-Driving features like Smart Summon. If Tesla does this, the company could still see a notable income stream for its software. At the same time, it could further tout the benefits of Autopilot making its entire fleet of vehicles much safer.
Tesla’s electric cars are already among the safest vehicles on the road. Model 3, for one, received a flawless 5-Star Rating in all categories and subcategories during the NHTSA’s test. With Autopilot as standard across the board, Tesla’s vehicles would become even safer.