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Tesla is patenting a clever way to train Autopilot with augmented camera images
Tesla is currently tackling what could only be described as its biggest challenge to date. In his Master Plan, Part Deux, CEO Elon Musk envisioned a fleet of zero-emissions vehicles that are capable of driving on their own. Tesla has made steps towards this goal with improvements and refinements to its Autopilot and Full Self-Driving suites, but a lot of work remains to be done.
As noted by Tesla during its Autonomy Day presentation last year, attaining Full Self-Driving is largely a matter of training the neural networks used by the company. Tesla adopts what could be described as a somewhat organic approach for autonomy, with the company using a system that is centered on cameras and artificial intelligence — the equivalent of a human primarily using the eyes and brain to drive.
Tesla’s camera-centric approach may be quite controversial due to Elon Musk’s strong stance against LiDAR, but it is gaining ground, with other autonomous vehicle companies such as MobilEye developing FSD systems that rely primarily on visual data and a trained neural network. This approach does come with its challenges, as training neural networks requires tons of data. Tesla emphasized this point as much during its Autonomy Day presentation.
With this in mind, it is pertinent for the electric car maker to train its neural networks in a way that is as efficient as possible with zero compromises. To help accomplish this, Tesla seems to be looking into the utilization of augmented data, as described in a recently published patent titled “Systems and Methods for Training Machine Models with Augmented Data.”
Teslas are equipped with a suite of cameras that provide 360-degree visual coverage for the vehicle. In the patent’s description, Tesla noted that images used for neural network training are usually captured by various sensors, which, at times, have different characteristics. An example of this may lie in a Tesla’s three forward-facing cameras, each of which has a different field of view and range as the other two.
Tesla’s recent patent describes a system that allows the company to process these images in an optimized manner. Part of how this is done is through augmentation, which opens the doors to flexible and widespread neural network training, even when it involves vehicles equipped with differently-specced cameras. The electric car maker describes this process as such:
“Augmentation may provide generalization and greater robustness to the model prediction, particularly when images are clouded, occluded, or otherwise do not provide clear views of the detectable objects. These approaches may be particularly useful for object detection and in autonomous vehicles. This approach may also be beneficial for other situations in which the same camera configurations may be deployed to many devices. Since these devices may have a consistent set of sensors in a consistent orientation, the training data may be collected with a given configuration, a model may be trained with augmented data from the collected training data, and the trained model may be deployed to devices having the same configuration.”
Among the most notable aspects of Tesla’s recent patent is the use of “cutouts,” which allow Tesla’s neural networks to be trained using an optimized set of images. This was something that was discussed by former Tesla Autopilot engineer Eshak Mir in a Third Row Podcast interview, where he hinted at a system adopted in the electric car maker’s ongoing Autopilot rewrite that helped lay out “all the camera images” from a vehicle “into one view.” Such a process has the potential to help Tesla with 3D labeling, especially since the images used for neural network training are stitched together. Tesla’s patent seems to reference a system that is very similar to that described by the former Autopilot engineer.
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“As a further example, the images may be augmented with a“cutout” function that removes a portion of the original image. The removed portion of the image may then be replaced with other image content, such as a specified color, blur, noise, or from another image. The number, size, region, and replacement content for cutouts may be varied and may be based on the label of the image (e.g., the region of interest in the image, or a bounding box for an object).”
Tesla is aiming to release a feature-complete version of its Full Self-Driving suite as soon as possible. Elon Musk remains optimistic about this, despite the company missing its initial timeline that was set at the end of 2019. That being said, Elon Musk did mention previously that Tesla is working on a foundational rewrite of Autopilot. In a tweet early last month, Musk stated that an essential part of the rewrite involves work on Autopilot’s core foundation code and 3D labeling. Once done, the CEO indicated that additional functionalities could be rolled out quickly. This recent patent, if any, seems to give a glimpse at how these improvements are being done.
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
