The electric vehicle (EV) giant Tesla will launch full self-drive technology this year and is expected to generate significant profits that offset some of the margin pressure it’s facing due to aggressive price cuts.
The test version of what Tesla calls Full Self-Driving (FSD) software will be “two steps forward, one step back between releases, but the trend is very clearly towards full self-driving, towards full autonomy.
The technology as it stands now has drawn legal and regulatory scrutiny following crashes. Tesla has said the technology does not make the car autonomous, and requires driver supervision. “I hesitate to say this but I think we’ll do it this year,” Tesla CEO, Mr. Elon Musk said.
Tesla’s financial chief Mr. Zachary Kirkhorn said its automotive margin in the first quarter was hurt not only by price cuts, but also increased deferred revenue for FSD software and that “this deferral should get recognized once some of the software catches up.”
Guidehouse Insights analyst Mr. Sam Abuelsamid said Tesla is making some changes to the car’s hardware, which disables some FSD features on newer vehicles temporarily. Tesla sells FSD software as an option for as much as $15,000.
Late last year, Tesla removed ultrasonic sensors from Model 3 and Model Y cars, and said some features such as “smart summon” and “auto park” would be temporarily unavailable.
“We do have this unique strategic advantage. We are making a car that, if autonomy pans out, that asset will be worth a hell of a lot more in the future than it is now,” Mr. Musk said.
