In a simple tweet, Tesla has revealed its plan to transition its long-awaited Full Self-Driving (FSD) feature out of beta and make it publicly available in North America. This move marks a significant leap forward in autonomous driving technology and sets Tesla apart from its competitors in the automotive industry.
One of the most striking aspects of this announcement is the sheer scale of its implementation. FSD will be accessible to all existing Tesla vehicles (Model 3, Model Y, Model X, and Model S) that have been produced since late 2018 and are equipped with the necessary gen 3 hardware. This broad compatibility instantly grants millions of Tesla owners the ability to drive autonomously, positioning Tesla far ahead of other car manufacturers in the race towards autonomy.
Tesla’s bold decision to forgo expensive hardware like LiDAR in favor of a vision-only approach based on cameras has proven to be the right one. By leveraging the power of cameras and sophisticated computer vision algorithms, Tesla has not only reduced the cost of implementing Full Self-Driving but has also enabled Tesla to equip every vehicle with the necessary hardware for autonomy, regardless of whether the FSD option was initially ordered or not. As a result, Tesla has created a level playing field, ensuring that all Tesla owners can benefit from the advancements in autonomous driving technology, further solidifying its position as a leader in the automotive industry’s transition towards autonomy.
What sets Tesla’s approach apart is its simplicity and accessibility. Unlike traditional updates that may require a visit to a dealership or a costly hardware upgrade (if offered at all), activating FSD is as easy as a few taps on the Tesla app.
The human factor: Clever positioning
With this rollout, Tesla has also introduced a significant shift in terminology, rebranding FSD as “Supervised”. This renaming emphasizes the role of the human driver, who retains ultimate responsibility and can intervene in case of errors. By framing autonomy as a supervised system rather than a fully autonomous one, Tesla acknowledges the importance of human oversight (and complies with applicable laws) while still pushing the boundaries of what is possible with self-driving technology. It also opens the door to other markets outside North America.
Leaving all competitors in the dust
While the term “Supervised” might initially suggest limitations due to its requirement for human interaction, the reality is quite the opposite for Tesla’s Full Self-Driving system. Despite competitors boasting about Level 3 certification for autonomous driving, Tesla has quietly achieved a staggering 99% mastery of Level 4 autonomy. This is in stark contrast to its competitors capabilities, which are often constrained to favorable weather conditions and highway-like driving, and only work as long as you stay on the same road. Tesla’s FSD operates seamlessly across various road types and environments. From highways to inner-city traffic, including complex intersections, traffic circles, pedestrians, cyclists, sudden roadworks, and even completely uncatographed areas, Tesla’s FSD Supervised mode stands out for its ability to navigate without human intervention.
Subscription vs. CAPEX
In a move aimed at further democratizing access to FSD, Tesla has introduced a new pricing model. In addition to the existing capital expenditure (CAPEX) option priced at $12,000, Tesla now offers a monthly subscription for just $99. This subscription model drastically lowers the entry level barrier for Tesla owners, particularly those with older vehicles for whom a large CAPEX investment does not make any sense.
The Robots are coming!
Tesla’s strategic decision to make FSD widely accessible aligns with its broader vision of revolutionizing transportation. By increasing the number of vehicles activated with the autonomous driving option, Tesla aims to gather valuable data to improve its algorithms rapidly. And because every vehicle delivered is already equipped with the complete technology stack, a lot of valuable data can be obtained within a very short time. This approach not only accelerates the development of FSD but also lays the groundwork for Tesla’s ambitious plans to launch a fleet of Robo-Taxis (Product announcement to follow on 8/8/2024).
Manual rule sets vs. AI
Central to Tesla’s approach is its shift towards AI-driven development. By replacing manually programmed rule sets with AI algorithms that learn from data collected from the entire vehicle fleet. This also allows the Tesla AI to understand how a human driver naturally behaves on the road, and therefore iterate and adapt its software quickly. Its data-centric approach not only increases the pace of development but also allows for easy adaptation to local conditions and traffic regulations, paving the way for global deployment of FSD.
Industrial Manufacturer vs. Software Company
Moreover, by positioning itself as a software provider, Tesla is venturing into new territory and distancing itself even further from the conventions of the automotive industry. Rumors abound that other manufacturers (such as Ford), could potentially license Tesla’s FSD technology for integration into their own vehicles. This potential for collaboration could not only benefit other automakers but also bolster Tesla’s valuation as a software company, potentially boosting investor confidence and share prices.
User vs. vehicle based subscription?
Finding the ideal consumption model for Tesla’s Full Self-Driving subscription involves striking a balance between flexibility and fraud prevention. While a user-bound subscription akin to streaming services initially seemed appealing for its flexibility, Tesla’s vehicle-based subscription offers more robust control against potential misuse. However, Tesla should enhance user experience by simplifying subscription management, allowing users to start or pause subscriptions easily, even for rental cars, thereby encouraging also short-term usage. As an example, Tesla could consider offering a daily subscription option, allowing users to activate Full Self-Driving for a single day at a reduced rate, perhaps at $7.50, catering to occasional users or those seeking short-term convenience. Additionally, introducing a yearly prepaid option with discounts would further incentivize long-term commitment and streamline the subscription process for users. Similarly, volume discounts for owners of multiple Tesla vehicles could convince them to activate this feature for all their vehicles.
Summary
In conclusion, Tesla’s decision to make its Full Self-Driving feature publicly available in North America by an affordable monthly subscritpion, marks a pivotal moment in the evolution of autonomous driving technology. It is to be hoped that other markets will follow suit in the near future. With its unparalleled accessibility, innovative pricing models, and AI-driven development approach, Tesla is poised to lead the charge towards a future where self-driving cars are not just a dream but a reality. Tesla’s paramount advantage lies in the fact that each of its vehicles comes fully equipped with the requisite technology, making activation as simple as a touch of a button. Rather than relying solely on one-time vehicle sales revenue, Tesla pivots towards a lucrative recurring stream through software subscriptions. Given the intricate and software-centric nature of this technology, certain car manufacturers may encounter challenges in independently integrating autonomous driving into their fleets. Tesla’s openness to licensing its Full Self-Driving (FSD) solution to third-party providers reflects a pragmatic approach that acknowledges the potential benefits of collaboration. Such a strategy would confer additional advantages to Tesla, as it would allow the company to capitalize on pure software revenue streams without assuming the risk and investment associated with constructing expensive manufacturing facilities.
//Alex
alexreusch 