The CEO said he is close to developing technology that will make all Tesla cars capable of driving themselves, repeating claims he has made for years but which he has yet to deliver. Tesla shares rose by 3% to their highest level more than eight months after the announcement, taking the company’s market capitalization to around $800 billion. That makes it the world’s most valuable automaker, ahead of Alphabet and Facebook.
Based in Palo Alto, California, Tesla uses a different approach from most other carmakers by focusing on neural networks and cameras rather than lidar sensors to help the car “see.” The firm has pushed back the timetable for fully autonomous driving but insists the technology will eventually become available to all drivers.
The company has already been selling vehicles with Autopilot, a feature that can adjust speed limits and steer within its lanes, but requires that the driver remain vigilant. The feature has been linked to several accidents that the company blames on human error. Still, it has also prompted some YouTube videos showing cars acting strangely, including one where the system veered into oncoming traffic.
To collect data, Tesla has encouraged owners to keep Autopilot on all the time – a practice that some critics say is dangerous. But the company also believes it needs to prove that the technology is safe, and it can only do so by showing how its software responds to different situations and conditions. It’s a similar approach to the way that Cadillac’s Super Cruise system works, which can only be used on divided highways and requires that the driver be alert at all times.
But the latest incident raises questions about whether Tesla can develop and implement the advanced self-driving technology it has long promised. The company has several projects underway, including a robot that can carry items in factories and an autonomous semi-truck that recently drove 3,000 miles from California to Pennsylvania to deliver butter. But its ambitions to create a fleet of free-roaming robot axis to address global labor shortages could face regulatory hurdles.
Analysts say Tesla is gaining traction in the market thanks to strong fourth-quarter results, price cuts to turbocharge demand, and a revised government tax credit that has broadened its appeal. But the market still needs to be convinced about whether the brand can achieve its long-term goal of becoming a dominant player in the robotaxi business. The company’s current margins are not nearly as high as those of traditional automakers, and it may struggle to compete with rivals if more price cuts are needed. Next year, a big test is expected when the first batch of autonomous Teslas will be tested for safety and performance. In the longer term, they may be deployed as part of a network of shared autonomous vehicles, known as a “robotaxis.” That could generate huge revenues and boost the utility of each vehicle by making it possible to send them out to work when owners are not in them.
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