News
Level 2 systems like Tesla Autopilot can improve drivers’ attentiveness: IIHS study
The Insurance Institute for Highway Safety (IIHS) recently published the results of a rather unique real-world driver attentiveness test. Using a 2019 Mercedes-Benz C300 equipped with a Level 2 Advanced Driver Assistance System (ADAS) and a giant pink teddy bear dressed in a yellow high-visibility jacket, the agency was able to roughly determine if systems like GM’s Super Cruise and Tesla’s Autopilot make drivers less attentive on the road.
The participants of the study included both drivers who were familiar with Level 2 driver-assist systems and drivers who had little to no experience with ADAS. The IIHS tasked those familiar with Level 2 systems to drive with the Mercedes-Benz C300’s ADAS activated. A group of drivers unfamiliar with ADAS was also tasked to drive with the system engaged. Lastly, a group of drivers who were unfamiliar with the vehicle’s Level 2 system was tasked to drive without the advanced driver-assist feature activated.
To test the drivers’ situational awareness, the IIHS had an SUV with a giant pink teddy bear strapped to its back pass the Mercedes-Benz C300 three times as the participants drove over a stretch of Interstate 70 in Maryland for about an hour. Each time, the SUV with the massive stuffed bear stayed in front of the drivers for about 30 seconds. Researchers then measured the participants’ reactions after their driving session, while asking if they saw anything odd during their hour-long drive.
Interestingly enough, nearly all of the drivers who were experienced with Level 2 systems noticed the giant pink bear. The same group also identified the number of times the bear overtook the C300 during the hour-long test. Drivers who were inexperienced with Level 2 systems didn’t perform as well, with a good number of inexperienced drivers who used the C300’s ADAS failing to remember the giant pink teddy bear at all.
“Our data suggest that Level 2 driving automation has the potential to improve a driver’s situational awareness (SA) once he or she is familiar with the technology, although it does not guarantee it. Unfamiliar drivers, however, appear to have even more difficulty maintaining SA when using the system than when driving without it. On average, participants who were familiar with Level 2 systems showed the highest degree of SA about the bear when using the system, unfamiliar participants who drove with the system off had moderate SA, and unfamiliar participants who drove with the system on demonstrated the lowest SA,” the IIHS wrote.
Videos from inside the C300 showed that the drivers who correctly identified the giant stuffed bear actually spent more time scanning the road ahead of them. These drivers, particularly those familiar with Level 2 systems, even tended to look out of the car’s side windows. On the other hand, those who missed the bear spent a considerable amount of time just focusing on the road straight ahead. Drivers who failed to spot the bear even once spent considerable time looking at various aspects of the C300’s dash.
Considering the results of the IIHS’ study, it appears that some experience with Level 2 systems would be best for drivers before they are allowed access to more advanced driver-assist systems such as Tesla’s Full Self-Driving Beta, which is poised to be rolled out to a greater number of electric car owners in a couple of weeks. Situational awareness, after all, is critical when driving, and having drivers nervously fiddling around their vehicles’ features while operating a Level 2 system may present some risks. That being said, the IIHS’ results do go in line with one of Elon Musk’s more notable points–systems like Autopilot could actually perform as a formidable safety feature, provided that they are used responsibly and properly, of course.
The IIHS’ situational awareness study could be accessed below.
IIHS Level 2 Autonomy Report by Simon Alvarez on Scribd
Don’t hesitate to contact us for news tips. Just send a message to tips@teslarati.com to give us a heads up.
News
Tesla confirms Robotaxi expansion plans with new cities and aggressive timeline
Tesla plans to launch in Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas. It lists the Bay Area as “Safety Driver,” and Austin as “Ramping Unsupervised.”
Tesla confirmed its intentions to expand the Robotaxi program in the United States with an aggressive timeline that aims to send the ride-hailing service to several large cities very soon.
The Robotaxi program is currently active in Austin, Texas, and the California Bay Area, but Tesla has received some approvals for testing in other areas of the U.S., although it has not launched in those areas quite yet.
However, the time is coming.
During Tesla’s Q4 Earnings Call last night, the company confirmed that it plans to expand the Robotaxi program aggressively, hoping to launch in seven new cities in the first half of the year.
Tesla plans to launch in Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas. It lists the Bay Area as “Safety Driver,” and Austin as “Ramping Unsupervised.”
These details were released in the Earnings Shareholder Deck, which is published shortly before the Earnings Call:
🚨 BREAKING: Tesla plans to launch its Robotaxi service in Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas in the first half of this year pic.twitter.com/aTnruz818v
— TESLARATI (@Teslarati) January 28, 2026
Late last year, Tesla revealed it had planned to launch Robotaxi in Las Vegas, Phoenix, Dallas, and Houston, but Tampa and Orlando were just added to the plans, signaling an even more aggressive expansion than originally planned.
Tesla feels extremely confident in its Robotaxi program, and that has been reiterated many times.
Although skeptics still remain hesitant to believe the prowess Tesla has seemingly proven in its development of an autonomous driving suite, the company has been operating a successful program in Austin and the Bay Area for months.
In fact, it announced it achieved nearly 700,000 paid Robotaxi miles since launching Robotaxi last June.
🚨 Tesla has achieved nearly 700,000 paid Robotaxi miles since launching in June of last year pic.twitter.com/E8ldSW36La
— TESLARATI (@Teslarati) January 28, 2026
With the expansion, Tesla will be able to penetrate more of the ride-sharing market, disrupting the human-operated platforms like Uber and Lyft, which are usually more expensive and are dependent on availability.
Tesla launched driverless rides in Austin last week, but they’ve been few and far between, as the company is certainly easing into the program with a very cautiously optimistic attitude, aiming to prioritize safety.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
Tesla is bringing closure to its flagship Model S and Model X vehicles, which CEO Elon Musk said several years ago were only produced for “sentimental reasons.”
The Model S and Model X have been light contributors to Tesla’s delivery growth over the past few years, commonly contributing only a few percentage points toward the over 1.7 million cars the company has handed over to customers annually since 2022.
However, the Model S and Model X have remained in production because of their high-end performance and flagship status; they are truly two vehicles that are premium offerings and do not hold major weight toward Tesla’s future goals.
On Wednesday, during the Q4 2025 Earnings Call, Musk confirmed that Tesla would bring closure to the two models, ending their production and making way for the manufacturing efforts of the Optimus robot:
“It is time to bring the Model S and Model X programs to an end with an honorable discharge. It is time to bring the S/X programs to an end. It’s part of our overall shift to an autonomous future.”
Musk said the production lines that Tesla has for the Model S and Model X at the Fremont Factory in Northern California will be transitioned to Optimus production lines that will produce one million units per year.
Tesla Fremont Factory celebrates 15 years of electric vehicle production
Tesla will continue to service Model S and Model X vehicles, but it will officially stop deliveries of the cars in Q2, as inventory will be liquidated. When they’re gone, they’re gone.
BREAKING: Tesla will wind down Model S and Model X production next quarter, Elon Musk confirms.
“It is time to bring the Model S and Model X programs to an end with an honorable discharge.” pic.twitter.com/Czn7aQjJE1
— TESLARATI (@Teslarati) January 28, 2026
Tesla has been making moves to sunset the two vehicles for the better part of one year. Last July, it stopped taking any custom orders for vehicles in Europe, essentially pushing the idea that the program was coming to a close soon.
Musk said back in 2019:
“I mean, they’re very expensive, made in low volume. To be totally frank, we’re continuing to make them more for sentimental reasons than anything else. They’re really of minor importance to the future.”
That point is more relevant than ever as Tesla is ending the production of the cars to make way for Optimus, which will likely be Tesla’s biggest product in the coming years.
Musk added during the Earnings Call on Wednesday that he believes Optimus will be a major needle-mover of the United States’ GDP, as it will increase productivity and enable universal high income for humans.
Tesla confirms Robotaxi expansion plans with new cities and aggressive timeline
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
