Elon Musk made an interesting comment about Tesla’s effort to develop self-driving. The CEO says that solving self-driving is the difference between Tesla being worth a lot of money or almost nothing.
Like the rest of the market lately, Tesla’s stock has taken a beating – though even more so than the rest of the market since Musk announced the acquisition of Twitter, which he sold Tesla shares to finance, and decided to become political, which has divided his fans.
Despite those tough past few months on the market, Tesla is still one of the most valuable companies in the world and worth almost $700 billion.
That’s why it’s interesting that when discussing Tesla’s software effort in an interview this week, Musk said the following:
The overwhelming focus is on solving full self-driving. That’s essential. It’s really the difference between Tesla being worth a lot of money or worth basically zero.
Musk suggests that Tesla would be worth almost nothing if it doesn’t solve self-driving, which the CEO has been confident that the company would solve despite several missed timelines.
Here’s the relevant part of the interview:
Tesla’s is currently developing self-driving technology through its Full Self-Driving (FSD) Beta program.
The automaker has been selling a FSD package for up to $12,000 that comes with a few driver assist features and the promise that Tesla will eventually enable self-driving capability through future software updates.
Tesla has missed a few deadlines on that front, and it is still not clear when the company can deliver on the promise.
Most recently, Musk has moved the goal post to Tesla simply having 1 million people in the FSD Beta program by the end of the year, but the FSD Beta is not a self-driving system as it requires a driver monitoring the system at all times and to be ready to take control at a moment’s notice.
Electrek’s Take
This is an interesting comment within the context of many people seriously doubting Tesla’s ability to deliver on its self-driving promises.
There have been more and more talks about Tesla actually needing to upgrade its hardware before it can deliver a true self-driving system through software updates.
Now on the other side, I think no one can argue that Tesla would be worth a lot of money if it solves the issue. If Tesla can enable a self-driving system in all its vehicles produced since 2016, as it promised, it will unlock hundreds of billions of dollars’ worth of value in its customer fleet and make every vehicle it produces today significantly more valuable.
On the other hand, would it be worth “basically zero” if it doesn’t achieve that? You would think not considering Tesla already has a very profitable business just selling electric vehicles driven by humans, but I think Musk is right and that’s his own doing.
FSD is a hole that Tesla has to crawl itself out of because it has been selling it to customers with promises. If it doesn’t deliver on those promises, or keeps delaying them, there’s going to be a reckoning – and it could be a costly one for Tesla.
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Author: Fred Lambert
Source: Electrek
