The Tesla bombshell almost nobody is talking about
By: Hans Van De Bruggen
Tags: Technology, Futurology, Future, Self Driving Cars, Tesla

Last week, Tesla held an event focused on their advances in autopilot and what they call “full self driving”. There, nearly three hours into the event, they made the announcement: not only will they have fully autonomous vehicles ready years ahead of the industry’s best estimates, Tesla expects to have a fleet of one million robotaxis on the road in 2020.

This time, there wasn’t the usual whooping and hollering from the Tesla loyalists. Instead, this was an event for investors. It was a more steadied and almost scholarly affair, with dizzyingly deep dives into the technology powering Tesla’s self-driving ambitions.

And the announcements—carrying world-changing ramifications, if the numbers are right—were delivered aloud into otherwise pindrop silence. It seemed the collective reaction of those in the room was a furrowed brow. Could Elon be believed? Still, onward he pressed, proclaiming a grand vision as though he’d only just returned from the future to share what he had seen. Maybe the claims seemed too far-fetched, maybe the event was too long, or perhaps it’s because the investors at the event were, for the most part, non-technical.

As someone in the tech industry myself, I had a hard time keeping up with the swirling Acronym Soup shared by presenters like Pete Bannon, esteemed former-Apple chip designer. But the overall message resonated: Tesla is ahead, they argued, because Tesla has the data. Whereas nearly every competitor is relying on Lidar, Tesla has placed their self-driving bets almost entirely on computer vision. Choosing to rely on cameras and cheap radar + ultrasonics has allowed them to deploy these sensors on every car they’ve sold for the past several years. Having sensors on every vehicle means they’ve been able to collect data from every mile driven from every Tesla produced in the past several years. That’s a huge number, and it’s increasing rapidly.

Lidar, meanwhile, is power hungry and expensive, adding anywhere from around $7K to $70K to the cost of the vehicle. The upshot is that the major Lidar-based competitors have several hundred cars on the road each, while Tesla has nearly half a million. And machine learning, which is needed for object recognition in any self-driving system, depends on access to mountains of data. In fact, it thrives on it — there’s a direct correlation between how much data you throw at a neural network and the quality of the results. Because they make their own cars, and because they’ve bet on cheaper sensors, Tesla is now sitting on an unmatched (and possibly unmatchable) pile of data, and that pile grows with each mile driven, with the rate of growth multiplying with each new vehicle sold.

In that light, Elon emphatically assures us their self-driving capabilities are improving “exponentially”, which would make the advent of full autonomy arrive much sooner than expected (and, frustratingly, will also make estimating its exact arrival date even more difficult). To demonstrate these advances, they gave investors fully-autonomous rides in standard off-the-shelf Teslas with remarkable capability improvements over the previous generation of software. In other words, given their advances in chip hardware and their substantial lead in real-world data, the final piece of their self-driving puzzle is software. Software which, once ready, can be deployed at the push of a button.

Tesla’s Full Self Driving system stopping for stop signs on surface roads. See the full demo video at the end of the article.

With the facts and figures out of the way, they delivered the real shocker of the event: robotaxis. As early as next year, your Tesla will be able to drive you home as you read a book, they say, as well as go off to make money for you as an autonomous robotaxi whenever you like. You can make money while you sleep, or earn a second paycheck while at your day job. The car can pay for itself, and then some.

Now, even taking that with the massive tablet of salt called “regulatory approval” combined with a healthy schedule adjustment to pad for Elon Time™, that’s still a staggeringly audacious proposal. Especially when you consider their back-of-the-napkin math:

The base self-driving Tesla costs about $38K.

As a robotaxi, the car will be able to earn around $30K per year. This assumes rides at half the cost of a Lyft or Uber, with half of the miles travelled being empty “dead legs”.

Tesla cars will be rated for one million miles, including the battery.

In the lifespan of the car, it can earn approximately $200K of income for the owner.

A $38K car bringing in $200K of income on its own? That’s insane. That’s impossible. And that’s being spearheaded by a team famous for achieving the impossibly insane.