Tesla has switched all vehicles in the Full Self-Driving Beta pool to Pure Vision, completely axing radar from any vehicles within the Beta fleet. Even if a member of the FSD Beta program has radar installed in their vehicle, Tesla’s Full Self-Driving beta program will not utilize it, adopting a stance that CEO Elon Musk has held for some time.
Previously, vehicles with radar capabilities still utilized it for Autopilot. However, when Tesla switched the Model 3 and Model Y to Pure Vision in May 2021, the automaker completely expunged the two mass-market vehicles of radar-based operation, relying only on the vehicle’s eight external cameras. Initial testing showed that vehicles without radar operated more accurately than those with cameras and radar.
As Tesla plans to transition all vehicles to Pure Vision, owners of vehicles that have recently joined the growing fleet of FSD Beta are now seeing that their cars are no longer utilizing radar, if their car has that capability. One owner who joined the Beta group, which expanded by roughly 1,000 users last night with the rollout of Version 10.2, stated that an email from Tesla told them that “Your vehicle is running on Tesla Vision.” Essentially, this means that the car is no longer utilizing the radar devices that previously were operational before the vehicle was added to the Beta fleet.
Teslarati obtained a copy of the email, which told all new FSD Beta members that their cars would no longer use radar.
“Hello,
We will be pushing FSD Beta Version 10.2 (2021.32.25) to your vehicle shortly!
Full Self-Driving is in limited early access Beta and must be used with additional caution. It may do the wrong thing at the worst time, so you must always keep your hands on the wheel and pay extra attention to the road. Do not become complacent. When Full Self-Driving Beta is enabled, your vehicle will make lane changes off highway, select forks to follow your navigation route, navigate around other vehicles and objects, and make left and right turns. Use Full Self-Driving Beta only if you will pay constant attention to the road, and be prepared to act immediately, especially around blind corners, crossing intersections, and in narrow driving situations. Every driver is responsible for remaining alert and active when using Autopilot and must be prepared to take action at any time.
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As part of receiving FSD Beta, your vehicle has automatically opted into VIN-associated telemetry sharing with Tesla, including Autopilot usage data, images and/or video. If you wish to be removed from the limited early access FSD Beta please email fsdbeta@tesla.com.
Your vehicle is running on Tesla Vision! Note that Tesla Vision also includes some temporary limitations, as noted below:
- Follow distance is limited to 2-7.
- Autopilot top speed is 80 mph.
Thanks,
Tesla Team”
CEO Elon Musk said that the reason for the transition for all Beta vehicles to utilize Pure Vision is because the performance of camera-based operation proved to be exceptionally better than radar and cameras. “Vision became so good that radar actually reduced SNR, so radar was turned off,” Musk said. Additionally, the CEO compared the current strategy of FSD to the basic functions of a human when driving. “Humans drive with eyes & biological neural nets, so makes sense that cameras & silicon neural nets are only way to achieve generalized solution to self-driving,” Musk added.
Vision became so good that radar actually reduced SNR, so radar was turned off.
Humans drive with eyes & biological neural nets, so makes sense that cameras & silicon neural nets are only way to achieve generalized solution to self-driving.
— Elon Musk (@elonmusk) October 11, 2021
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In the past, Musk has always had plans of switching to camera-based FSD operation. During the company’s Q1 2021 Earnings Call in April, Musk said that radar was good for “making up for some of the shortfalls of vision,” but eventually Tesla would have to figure out how to get away from radar. “When your vision works, it works better than the best human because it’s like having eight cameras, it’s like having eyes in the back of your head, beside your head and has three eyes of different focal distances looking forward. This is — and processing it at a speed that is superhuman. There’s no question in my mind that with a pure vision solution, we can make a car that is dramatically safer than the average person,” Musk stated.
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In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
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Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
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High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
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Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
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However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
