Tesla Motors Inc: What Holds High Priority Other than Model 3?

Tesla Motors: What Holds High Priority Other than Model 3?
Elon Musk Doubles Down on its Autonomous Car Dreams; says new Autopilot version will blow people away

Elon Musk had a strenuous job to do this week at second quarter earnings call, as Tesla Motors Inc. (NASDAQ:TSLA) leader had to answer variety of fiery questions from Street analysts, who are anxiously looking at the company’s rapid expansion. Despite announcing acquisition of solar battery installer, SolarCity, and producing solar battery units, Tesla continued to stick to its basics of producing and selling electric cars — the very business it is known for.

At the earnings call, Mr. Musk announced that he will focus on development of its upcoming mass market Model 3, which will be the company’s first cheaper car to target masses. To underscore the importance of this project, Mr. Musk raised $1.7 billion vie secondary share offering, which will be utilized for the fast production of Model 3.

But there is one more thing Elon Musk gives high priority to; its dream of introducing a fully autonomous driving feature. Mr. Musk claims the next version of its semi-autonomous driver assist feature is likely to “blow people away.”

At the earnings call, he said: “I am very optimistic about this. It blows me away. If I am this close to it and it is blowing me away, it is really going to blow other people away."

What to Expect in the Next Autopilot Version?

Every new Autopilot version raises the bar of vehicle autonomy. The company upgrades its vehicle wirelessly, through over the air software updates, without asking their customers to bring their cars at their closest Tesla Store.

At the earnings call, Mr. Musk hinted on developing high-definition mapping software to help its computerized software to take over wheels. Mr. Musk calls it narrow artificial intelligence. He said: “When I say narrow AI, it is not going to take over the world, but it needs to be good at driving a car.” He added that to come up with full autonomy, they need to develop advance narrow AI. “So increasingly sophisticated neural nets that can operate in reasonably sized computers in the car. That is our focus,” said the visionary head of Silicon Valley electric car maker.

Digital mapping service has a great value in the business of connected cars, which not only allows better navigation system, but also helps connect an individual car to the network of large data centers. Detroit auto giant General Motors Company (NYSE:GM) has its very own connected car data service called OnStar. Through this, GM already has over a million of connected cars running on streets.

Tesla Motors is currently working to improve its Autopilot feature, which was launched last year at entire fleet of Tesla vehicles and is still in “beta” phase. The company says that the “beta” description does not limit the usability of the feature as it is still very much reliable and it has 130 million miles of tested data driven on Autopilot.

However, the automaker was pushed to the corner by media publications and analysts to justify how safe is the feature, as it recently caused a fatality of Joshua Brown in Model S. The car crashed to a trolley and scrapped off the roof while the vehicle had Autopilot feature operating. National Highway Traffic Safety Administration (NHTSA) opened an investigation on the crash, but Tesla defended the feature.

Tesla announced that the crash happened as its system was not able to detect the white lorry against contrast of a bright day light. When the automaker launched the feature last year, it had already said the feature is not fully autonomous and requires the driver to keep their hands on the wheel. The automaker claims that many of its customers don’t know how the feature works, and plans to further guide them about the usability of Autopilot, as well as come up with several improvements by working closely with its suppliers, Germany’s Bosch and Israel-based Mobileye.

Mobileye recently announced to terminate its ties with Tesla Motors, but will continue to work on existing Autopilot system of EyeQ3. It looks like Tesla will not be accompanied by Mobileye down its road to come up with fully autonomous cars.

Tesla Motors stock currently trades at $229.55, slightly down 0.5%. The stock did not show a major fluctuation after 2Q earnings result, as the company balanced its earnings miss with ambitious delivery targets.

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