Elon Musk’s cautionary statements about uncontrolled experimentation with artificial intelligence (AI) have caused some to ridicule him as a fear-monger, and have given many in the mainstream press the idea that he is opposed to using AI, which is very far from the truth. In fact, AI is a major component of Tesla’s Autopilot system, and the company applies it in several other areas as well.
It was only recently that Tesla publicly revealed that it is working on its own AI hardware. At the NIPS machine learning conference in December, Elon Musk announced that Tesla is “developing specialized AI hardware that we think will be the best in the world.” The company has offered few details, but it’s widely assumed that the main application will be processing the algorithms for Tesla’s Autopilot software.
As Bernard Marr reports in a recent article in Forbes, there’s little doubt that Tesla is way ahead of its potential rivals in the data-gathering department. Every Model S and X built with the Autopilot hardware suite, which was introduced in September 2014, has the potential to become self-driving, and all Tesla vehicles, Autopilot-enabled or not, continually gather data and send it to the cloud. The company has many more sensors on the roads than any of its Detroit or Silicon Valley rivals, and the number will mushroom when Model 3 production hits its stride.
Tesla is crowd-sourcing data not only from its vehicles, but could one day obtain data on its drivers through internal cameras that detect hand placement on instruments or a person’s state of alertness. The company uses the information not only to improve Autopilot by generating data-dense maps, but also to diagnose driving behavior. Many believe that this sort of data will prove to be a valuable commodity that could be sold to third parties (much as data on web-browsing habits is today). McKinsey and Company has estimated that the market for vehicle-gathered data could be worth $750 billion a year by 2030.
Forbes explains that the AI built into Tesla’s system operates at several levels. Machine learning in the cloud educates the entire fleet, while within each individual vehicle, “edge computing” can make decisions about actions a car needs to take immediately. There’s also a third level of decision-making, in which cars can form networks with other Tesla vehicles nearby in order to share local information. In the future, when there are lots of autonomous cars on the road, these networks could also interface with cars from other makers, and systems such as traffic cameras, road-based sensors, and mobile phones.
At this point, no one knows what new forms of AI technology the mad scientists in Palo Alto are cooking up, but Forbes found some clues on the Facebook page of Tesla’s hardware partner Nvidia: “In contrast to the usual approach to operating self-driving cars, we did not program any explicit object detection, mapping, path planning or control components into this car. Instead, the car learns on its own to create all necessary internal representations necessary to steer, simply by observing human drivers.”
This unsupervised learning model contrasts with the more familiar approach of supervised learning, in which algorithms are trained beforehand about right or wrong decisions. Each approach has its pros and cons, and it’s likely that Tesla’s strategy includes both.
Forbes reports that Tesla’s use of AI is not limited to Autopilot – the company employs machine learning in the design and manufacturing processes, to process customer data, and even to scan the text in online forums for insights into commonly-reported problems. It’s ironic that some in the press choose to portray Elon Musk as an AI Luddite, when in fact Tesla may be one of the most sophisticated users of the technology.
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Note: Article originally published on evannex.com, by Charles Morris
Source: Forbes
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Xpeng CEO: Tesla FSD 14.2 has developed “near-Level 4” performance
While acknowledging that imperfections remain, the Xpeng CEO said FSD’s current iteration significantly surpasses last year’s capabilities.
Xpeng CEO He Xiaopeng has offered fresh praise for Tesla’s Full Self-Driving (FSD) system after revisiting Silicon Valley more than a year after his first hands-on experience.
Following extended test drives of Tesla vehicles running the latest FSD software, He stated that the system has made major strides, reinforcing his view that Tesla’s approach to autonomy is indeed the proper path towards autonomy.
Tesla FSD closing in on Level 4 driving
During his visit, He test-drove a Tesla equipped with FSD V14.2. He also rode in a Tesla Robotaxi. Over roughly five hours of driving across Silicon Valley and San Francisco, He said both vehicles delivered consistent and reassuring performance, a notable improvement from his experience a year earlier.
According to He, Tesla’s FSD has evolved from a smooth Level 2 advanced driver assistance system into what he described as a “near-Level 4” experience in terms of capabilities. While acknowledging that imperfections remain, the Xpeng CEO said FSD’s current iteration significantly surpasses last year’s capabilities. He also reiterated his belief that Tesla’s strategy of using the same autonomous software and hardware architecture across private vehicles and robotaxis is the right long-term approach, allowing users to bypass intermediate autonomy stages and move closer to Level 4 functionality.
He previously tested Tesla’s FSD V12.3.6 and Waymo vehicles in California in mid-2024, noting at the time that Waymo performed better in dense urban environments like San Francisco, while Tesla excelled in Silicon Valley and on highways.
Xpeng’s ambitious autonomy roadmap and internal challenge
The Silicon Valley visit also served as a benchmark for Xpeng’s own autonomy ambitions. He stated that Xpeng is looking to improve its VLA autonomous driving system to match the performance of Tesla’s FSD V14.2 within China by August 30, 2026. Xpeng is poised to release its VLA 2.0 smart driving software next quarter, though He cautioned that the initial version will not be able to match FSD V14.2’s capabilities, as noted in a CNEV Post report.
He also added a personal twist to the goal, publicly challenging Xpeng’s autonomous driving team. If the performance target is met by the 2026 deadline, the CEO stated that he will approve the creation of a Chinese-style cafeteria for Xpeng’s Silicon Valley team. If not, Liu Xianming, head of Xpeng’s autonomous driving unit, has pledged to run naked across the Golden Gate Bridge, He noted.
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Another Tesla Model 3 variant sold out for January 2026 in China
A look at Tesla China’s order page shows that new Model 3 LR RWD orders now have an estimated delivery date of February 2026.
Another Tesla Model 3 variant in China appears to have sold out for January 2026, with the vehicle now showing an estimated delivery date of February 2026 for new orders. This bodes well for the all-electric sedan, which has maintained notable sales despite more affordable rivals like the Xiaomi SU7 and its crossover sibling, the Model Y.
Model 3 LR RWD joins February 2026 queue
A look at Tesla China’s order page for the all-electric sedan shows that new Model 3 Long Range Rear Wheel Drive orders now have an estimated delivery date of February 2026. Priced from RMB 259,500 ($36,810), the LR RWD sits as the second-lowest-priced trim in Tesla China’s four-variant Model 3 lineup. The move follows a similar delivery timeframe for the Model 3 Performance, which remains the most expensive option for the vehicle, as noted in a CNEV Post report.
The estimated delivery dates of the two remaining Model 3 variants remain unchanged for now. The base RWD version, starting at RMB 235,500, and the LR AWD variant, priced from RMB 285,500, both continue to list estimated delivery times of 4-6 weeks. Tesla China, for its part, has continued to list in-stock Model 3 vehicles and is actively encouraging buyers to select inventory units for delivery before the end of the year.
Model Y delays and policy shifts
Delivery timelines for the Model Y in China are also stretching into 2026. All customized Model Y variants now show February 2026 as their estimated delivery date, except for the entry-level version, which still lists January 2026. Tesla has been urging customers since November to prioritize purchasing inventory vehicles, a push aimed at maximizing year-end deliveries.
Timing matters for Chinese buyers due to upcoming changes in government incentives. China’s new energy vehicle purchase tax exemption will be scaled back in 2026, which means customers who take delivery next year could face higher tax costs compared to those who are able to receive vehicles before the end of the year.
As per data from the China Passenger Car Association, Tesla recorded retail sales of 73,145 vehicles in November, down 0.47% year over year. From January through November, Tesla’s retail sales in China totaled 531,855 units, a 7.37% year-over-year drop.
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Wedbush’s Dan Ives sees ‘monster year’ ahead for Tesla amid AI push
In a post on X, the analyst stated that the electric vehicle maker could hit a $3 trillion market cap by the end of 2026 in a bullish scenario.
Wedbush analyst Dan Ives is doubling down on Tesla’s (NASDAQ:TSLA) long-term upside. In a post on X, the analyst stated that the electric vehicle maker could hit a $3 trillion market cap by the end of 2026 in a bullish scenario, thanks to the company’s efforts to develop and push its artificial intelligence programs.
An aggressive valuation upside
Ives, Wedbush’s global head of tech research, stated in his post that Tesla is entering a pivotal period as its autonomy and robotics ambitions move closer to commercialization. He expects Tesla’s market cap to reach $2 trillion in 2026, representing roughly 33% upside from current levels, with a bull case up to a $3 trillion market cap by year-end.
Overall, Ives noted that 2026 could become a “monster year” for TSLA. “Heading into 2026, this marks a monster year ahead for Tesla/Musk as the autonomous and robotics chapter begins. We believe Tesla hits a $2 trillion market cap in 2026 and in a bull case scenario $3 trillion by end of 2026… as the AI chapter takes hold at TSLA,” the analyst wrote.
Ives also reiterated his “Outperform” rating on TSLA stock, as well as his $600 per share price target.
Unsupervised Full-Self Driving tests
Fueling optimism is Tesla’s recent autonomous vehicle testing in Austin, Texas. Over the weekend, at least two Tesla Model Ys were spotted driving on public roads without a safety monitor or any other occupants. CEO Elon Musk later confirmed the footage of one of the vehicles on X, writing in a post that “testing is underway with no occupant in the car.”
It remains unclear whether the vehicle was supported by chase cars or remote monitoring, and Tesla has not disclosed how many vehicles are involved. That being said, Elon Musk stated a week ago that Tesla would be removing its Safety Monitors from its vehicles “within the next three weeks.” Based on the driverless vehicles’ sightings so far, it appears that Musk’s estimate may be right on the mark, at least for now.
Xpeng CEO: Tesla FSD 14.2 has developed “near-Level 4” performance
Another Tesla Model 3 variant sold out for January 2026 in China
