The Tesla Autonomous Ruse Rolls On

Summary

• Tesla's supporters believe the myth that Tesla is ahead in self driving.
• The company often feeds this myth, by promising what looks like yet another massive advancement that others supposedly don't have.
• These myths can easily be shown to, well, be myths. That's what this article again does, with easily verifiable facts.

OMG Is That A Tesla Truck Convoy?? Already?? Must Be Since Nobody Else Has The Tesla Platooning Technology!!

In a few previous articles (I, II, III), I have already covered Tesla’s (NASDAQ:TSLA) position in the race towards the fully autonomous car. Rest assured that Tesla's position isn’t pretty. But of course, Tesla believers wouldn’t have any of that. For them, faith is stronger than any data showing Tesla to be behind.

Today, I have a few more data points to show how this self-driving ruse is evolving. Let us consider, then …

The LA To NYC Autonomous Trip

In a bid to show just how advanced Tesla is, Elon Musk has promised that by the end of 2017, Tesla would demonstrate a Model S going “from a parking lot in LA to a parking lot in NYC with no controls touched in the entire journey."

That sounds impressive. For the believers, such an achievement would herald the arrival of self-driving cars. It would cement Tesla’s leadership in the field. It would erase any doubt, if ever there was any.

OK, now let’s consider the following:

• LA to NYC is roughly 2,800 miles by car.

• It’s basically a highway trip. Arguably 95%-plus, and perhaps as much as 99%, of the trip is spent on highways (US-101 S, I-15 N, I-70 E, I-76 E, I-80).
• Highways are the easiest of all self-driving challenges. So easy are they, that when analyzing self-driving prowess using California’s test data, I even excluded BMW and Ford’s performance because it all being achieved on highways. I did this in spite of it making Tesla look better in the comparisons, because both showed better performance than Tesla yet were excluded. (Excluding BMW and Ford, likely unrepresentative because of being highway-only.)

• Now for the best. Remember, Tesla promised ~2,800 miles of nearly-all-highway autonomous driving as some kind of proof. Tesla promised this for 2017 year-end. Well, Google’s (GOOG) (GOOGL) Waymo went for 5,128 miles on average, during 2016, between needed human interventions. In other words, during 2016 Google achieved nearly double the autonomous distance, on average and between needed human interventions, versus what Tesla is proposing for end-2017. Moreover, Google did this overwhelmingly in a urban or sub-urban setting – a setting orders of magnitude more complex than what Tesla promises. In other words, Tesla is promising for the end of 2017 something massively easier than what Google was regularly achieving 1.5 years early (on average) under much more trying conditions.

This ought to be proof enough, for anyone serious, of just how far back Tesla stands in the autonomous race. Oh, and in case you think you'll get Tesla's self-driving software right after Elon Musk demos this "achievement," you won't. It will be just a demo, versus Google or GM (GM) which are already giving trips to outsides regularly.

Autopilot 2.5

Another interesting development on the “race to autonomy” is that Tesla is now selling cars with an updated hardware suite. That is, the currently shipping cars have hardware “2.5” versus the hardware 2.0 which was shipped from Q4 2016, and which was billed to be enough to reach full self-driving at SAE Level 5.

While Tesla has un-officially promised that past customers will get the new hardware for free if needed, this still presents a negative development. It makes no sense to improve the hardware if you only need weaker hardware to fully accomplish your self-driving promises. Moreover, the previous hardware was a selling point not just for those who incomprehensibly paid for the $3,000 FSD option, but also for those who didn’t buy autopilot features at all, or just bought EAP (Enhanced AutoPilot).

Moreover, with Tesla having Jim Keller working on hardware, it’s clear that the hardware revisions won’t stop here, even though Tesla promises Level 5 self-driving ability all the way back to AP2. Never mind that Tesla can’t even be sure of achieving good enough self-driving at this point, no matter what the hardware is (the problem isn't completely solved for Tesla or anyone else, so while companies can have expectations about possible end-dates, they can't have certainties).

Truck Platoons

Tesla is always thick with new promises. For most, these promises sound like innovation, like Tesla is ahead. As I showed a few times (and again in this article), Tesla’s self-driving development severely lags what others are accomplishing or even accomplished years ago.

Still, Tesla always has a new promise. What is the latest self-driving promise? Well, Tesla is supposedly about to show self-driving on trucks. And more specifically, Tesla is about to demo self-driving trucks doing “platooning.” That is, a convoy of trucks autonomously following a lead truck (which can be driven by a human). This sure looks like a way to cut trucking costs (both fuel and labor) doesn’t it? Tesla is really thinking forward, isn’t it?

Now consider this:

• Volvo was demo’ing autonomous car convoy technology as far back as 2010-2011.
• Volvo also demo’d the same technology in trucks in 2012.
• Volvo and other brands demo’d truck platoons during an European-wide challenge in 2016.

To put it in other words, this technology which seems to innovative when brought to you by Tesla, has already been in development and was demonstrated by several other competitors as far back as half a decade ago.

Conclusion

Tesla has been achieving something extraordinary: it manages to plant the idea that it’s a leader in many fields, even when there’s very concrete evidence to the contrary. This seems to be achieved through capturing an audience that at the same time idolizes Tesla and lacks actual knowledge of the developments in the fields Tesla claims to lead in.

Ultimately, since Tesla’s lead isn’t a reality, this will come back to bite the believers. This will happen in several ways:

• Others will achieve practical self-driving ahead of Tesla. This is already somewhat obvious, since others (GM, Google) already have self-driving cars in real world environments, with their use open to independent third parties. This will over time kill the “Tesla is ahead” myth.
• Tesla won’t be able to reach SAE Level 5 self-driving on its current hardware (neither 2.0 nor 2.5). This will destroy the notion that Tesla Network can work with the present vehicles. It can’t.
• Tesla will ultimately have a liability for promises unfulfilled. Tesla knows this: the FSD option costs just $3,000 versus the supposedly much simpler EAP at $5,000. Tesla’s intent will be to contain the liability just to the amounts wrongly paid for FSD. However, it can be argued that the liability will extent to all cars sold by Tesla carrying AP2. This will be argued in court, and it’s hard to establish who will prevail. The cars were sold on the notion that they had all the necessary hardware to reach FSD, an ability that convinced even those who didn’t buy FSD, since they could buy it later (a possibility which will likely be removed at some point).

Please don't shower me with "Tesla is up bwahahaha." I know it's up. I know it can head higher. Indeed, if you ask me, it looks like it can't but head higher, no matter what the facts are. That doesn't change the facts.

Disclosure: I am/we are short TSLA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.