Tesla (TSLA) to Expand 'Full Self-Driving Capability' Beta

Increased access to software comes amid criticism from regulators

Tesla, Inc. (TSLA) is planning to ramp up its roll out its of Full Self-Driving (FSD) software to customers by the end of this week. But regulators aren't too happy about it.

Key Takeaways

  • Tesla plans to offer access to the latest version of its advanced driver assistance software to more drivers starting this Friday.
  • The National Transportation Safety Board head says the company's use of full self-driving to describe its features is "misleading and irresponsible" and encourages "abuse of the technology."
  • Revenue from FSD subscriptions could boost Tesla's top line.

A Trial Full Self-Driving Capability

In a tweet last week, Tesla CEO Elon Musk said that the FSD Beta V10.0.1 will be available to more drivers starting Sept. 24. The previous Beta release was tested with 2,000 drivers mostly on highways for almost a year in California.

The latest FSD version's scope has been expanded to navigating highways and city streets. A Beta button available in Tesla vehicles will request permission to assess monitor driver performance for "good behavior" for seven days before granting full beta access to the FSD functionality suite. Even though the FSD feature is meant to provide a degree of autonomy from driving tasks, Tesla requires drivers to remain fully engaged with their vehicles and always have their hands on the steering wheel.

A rash of accidents and mishaps have plagued Tesla vehicles since the first introduction of Autopilot and Self-Driving capability. The company is currently being investigated by the National Highway Transportation Safety Administration (NHTSA) for its Autopilot feature. The agency expanded the scope of its investigation recently by requesting data from other automakers that have incorporated similar features in their vehicles. 

Full Self-Driving or Driver Assistance Software? 

Tesla refers to its systems as Autopilot or self-driving systems, thereby implying auto-navigation and driving capability for its vehicles. They are actually advanced driver assistance systems (ADAS) that automate driving tasks. Examples of such tasks include parking cars using the Summon feature, navigating on Autopilot, and moving from a highway on-ramp to off-ramp and changing lanes. Tesla's systems are currently at Level 2. Full autonomy—or a vehicle that is capable of driving itself through city streets and highways—is achieved only at Level 5. In previous earnings calls and presentations, Tesla CEO Elon Musk has provided ambitious timelines to roll out full self-driving, only to backtrack and call the feature's development and implementation "really quite, quite tricky."

Not surprisingly, safety regulators have taken exception to Tesla's latest efforts to market its self-driving offerings. Jennifer Homendy, head of the National Transportation Safety Board, characterized Tesla's use of the FSD term as "misleading and irresponsible" and said that its use has "misled numerous people to misuse and abuse technology." Homendy told The Wall Street Journal, "Basic safety issues have to be addressed before they're then expanding it to other city streets and other areas."

Meanwhile, a recent MIT study concluded that drivers are less engaged with their Tesla vehicles in Autopilot mode. According to the study's authors, drivers looked less on road and were more involved in non-driving tasks during Autopilot as compared to manual driving. "Visual behavior patterns change before and after [Autopilot] disengagement," the authors wrote. "The higher proportion of off-road glances before disengagement to manual driving were not compensated by longer glances ahead."

Self-Driving to Profits? 

Tesla's push to expand the market for its FSD subscriptions could boost its revenue in the coming quarters. The company charges $199 per month for an upgrade from Basic Autopilot to FSD capability. Downloading the entire FSD suite cost $10,000.

Gene Munster, Loup Ventures managing partner, has estimated that booked operating profit from FSD will jump from the current $600 million in 2021 to $102 billion in 2032, if 80% of Teslas on the road at the end of 2013 opt to subscribe to the feature. FSD news and advances also have an effect on the company's stock price. Tesla's stock fell by 5% after the NHTSA announced its investigation in August.

Article Sources

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  5. Yahoo. Tesla's FSD Could be Worth More Than Its Market Cap In a Decade. Accessed Sep. 21, 2021.