Tesla - the path to full self driving value
Tesla are pushing forwards with their autopilot software and autonomous driving with what they call full self driving or FSD. Musk has a number of visions on what this will bring, from being 'feature complete' by the end of the year to the Robotaxi where your car can go out and earn you money when you're not using it.
We're sceptical to say the least for the following reasons:
- The regulators are simply years away from approving full self driving technology (FSD) in any meaningful way. The suggestion that a statistical model of only 1 or 2 orders of safety better than humans is going to be acceptable is laughable whatever that translates to in terms of human life. We can not think of any area of society other than medicine where such calculations are made with such close ratios. Imagine somebody coming out with a suggestion that its ok for elevators to cause 10k deaths a year, because 20k people a year die walking up stairs from heart attacks. Risk calculations are much more conservative with respect to injury and fatalities.
- And insurance companies won't underwrite it, and after a handful of accidents the world will be bogged down in legal arguments, investigations and so on. The worldwide fleet of Boeing 737 aircraft have been grounded because of a failing in the technology, the first suggestion of a bug in car will result in the feature being disabled across the world causing immense damage to Teslas reputation and possible litigation. We aleady see major investigations after fatal accidents involving a Tesla where their is as suspicion that the autopilot software is engaged and even when it is still clear the driver is responsible, Tesla have been held to account.
- The ability to autonomously drive in all scenarios (ie level 5) increases the complexity vastly. Anybody that has driven in some countries will realise how the laws of the road vary massively from area to area, not an insolvable problem but the models need to be trained and retrained for these constant local differences. But what does driving a car really mean in these places? It is not simply following a rule book in the traditional sense, its often about establishing a presence on the road and at times imposing yourself on others through assertive driving. You would be stationary for a long time without such an approach in many cities. You could try and limit the use to countries where there driving standards are better, but even in the UK, which has one of the lowest accident rates in the world and driving standards are relatively high, there are still countless situations where you need to show a degree of assertiveness to make progress.
- It is not just about assertiveness, sometimes its the opposite and you need to yield even when you have the theoretical right of way. If you met a tractor in a country road and you have a car behind you, who gives way? What if the car behind you was towing a caravan. Or it was just after a tight bend? There are pragmatic situations where the cars would need to back up as it is unrealistic for the tractor to reverse. Or you may decide to bump up a curb or onto grass at the side of the road as a temporary measure, sometimes not strictly lawful driving behaviour.
- In urban areas, people would abuse the knowledge that the car would yield and walk out in front of them. The challenge is not just a case of the car doing what we do, its about the car doing completely new things. Road design would need to change, society would need retraining, laws would need to be introduced regarding jay walking around the world with the ability to identify the pedestrian and prosecute.
- Tesla have maintained in all their marketing that FSD will enable the car to be driven in nearly all circumstances, they have not claimed that FSD is driverless on the current cars. It may be a dream in the future, but the suggestion that the current cars will be capable of driverless driving is simply not plausible. The sensors already disable on a regular basis due to weather and the sensor technology isn't something that can be easily bypassed with code. The technology still struggles to determine stationary obstacles in the road illustrated by cars crashing into fire engines on main roads, and even when the technology does start to detect the obstacle it needs to do it at a range where the car can safely stop and not using emergency breaking. At 70 mph that is a considerable distance and at the limit of the cameras accuracy.
So in our opinion, full self driving in the sense of driverless driving, is simply not a plausible with the current cars, the current technology, the current legislation and the current public appetite for accident rates.
So where's the path to value?
The value is the selective targeting of level 4 driving.
Rather than focus on the feature set for all areas of driving and chasing a goal that is thwarted with issues, we believe that Tesla should take a different approach. Their current development road map appears to be trying to enable the car to autonomously drive in an ever increasing percentage of situations, but rather than achieve 95% ability on 100% of roads, with driver intervention when it fails (level 2 autonomy) we believe they would be better by focusing on 100% of the required ability on 50% of the roads.
So what does that look like? If we consider the hardest road conditions to drive on, they're urban situations. Parked cars, pedestrians, turning across traffic, stop signs and lights, merging onto roundabouts, single lane roads where you need to yield for oncoming traffic. The list goes on. These are not trivial issues and the penalty for getting it wrong can be very high.
But there is a class of road where many of these are not present, and they're also roads where drivers spend several hours in boredom. Freeways, Motorways, Autobahns, The main trunk roads across countries. Autopilot is already incredibly close to addressing these roads in their entirety, Tesla should divert ALL resources into completing the job and getting approval for level 4 autonomy on such road types. To do so they need to resolve the following challenges, which they need to solve regardless of approach, we are just changing the priority:
- They need to work on the process of the driver handing over control to the car and the car handing it back in a controlled and predictable manner. This goes beyond a simple pulling of a control stalk, especially in the handing back to the driver, and the safety protocol in how to deal with the situation where the driver is fast asleep and isn't ready to resume control
- They need to increase the reliability. The accident rate is currently reported as twice as safe, we believe that in itself is debatable, but the safety margins needs to be considerably higher. Current motorway fatality rates are currently 1 in a billion motorway miles driven in the UK. Tesla accident rates (accepting that accidents and fatalities are somewhat different) are 1 in every 3 million miles. In the UK there could be 300 none fatal accidents to every fatal just to maintain parity with the current statistics. Tesla need to be looking at an accident rate probably in excess of 100x better than its current rate to be credible
- They need to address stationary vehicle detection at a range of half a kilometre, The bare minimum is the stopping distance at 70 mph and that is 100m. Equally they need to improve their reliability at detecting lane markings in poorly marked roads.
If they crack this scenario such that a driver can drive the first mile or 2 to the interstate and then settle back and work on their laptop for 2 hours while the car drives, and then takes back control, it would be the first truly autonomous, publicly accessible feature. Tesla can then extend their footprint from this base.
This is less about feature complete of all features, but execution poor, its about feature perfected for the subset of features required for a specific road type. Get one road type cracked and the rest will eventually follow. There is a related benefit to this approach too. The human behaviour aspects of driver aids such as the current implementation of autopilot means it is increasingly abused by drivers. Liberties can be taken, and the driver often gets away with them, and the better the system becomes the less prepared many drivers will be to intervene when the need arises. To move to a lower standard of AP on inappropriate roads, and a higher standard on selected roads, together with the development of better understanding and assessment of the drivers ability to resume control will lead to a reduction in the number of accidents from driver abuse.
The approach we believe that will give both motorists and shareholders value is therefore narrow the scope and execute completely, this will be quicker to market and safer for all. As its purely a subset of the overall vision it can't be slower, but the first to market with the approvals to use it in a public setting will set the precedent, take the first mover advantage and in turn boost product sales, the value of FSD, the reputation and, if Musks claims of wanting to the safest, the greatest of all value, fewer road fatalities and serious injurys.