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Selling Full Autonomy Before It's Ready Could Backfire For Tesla (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: Tesla has an Autopilot problem, and it goes far beyond the fallout from last month's deadly crash in Mountain View, California. Tesla charges $5,000 for Autopilot's lane-keeping and advanced cruise control features. On top of that, customers can pay $3,000 for what Tesla describes as "Full Self-Driving Capability." "All you will need to do is get in and tell your car where to go," Tesla's ordering page says. "Your Tesla will figure out the optimal route, navigate urban streets (even without lane markings), manage complex intersections with traffic lights, stop signs and roundabouts, and handle densely packed freeways with cars moving at high speed." None of these "full self-driving" capabilities are available yet. "Self-Driving functionality is dependent upon extensive software validation and regulatory approval, which may vary widely by jurisdiction," the page says. "It is not possible to know exactly when each element of the functionality described above will be available, as this is highly dependent on local regulatory approval."
But the big reason full self-driving isn't available yet has nothing to do with "regulatory approval." The problem is that Tesla hasn't created the technology yet. Indeed, the company could be years away from completing work on it, and some experts doubt it will ever be possible to achieve full self-driving capabilities with the hardware installed on today's Tesla vehicles. "It's a vastly more difficult problem than most people realize," said Sam Abuelsamid, an analyst at Navigant Research and a former auto industry engineer. Tesla has a history of pre-selling products based on optimistic delivery schedules. This approach has served the company pretty well in the past, as customers ultimately loved their cars once they ultimately showed up. But that strategy could backfire hugely when it comes to Autopilot.
But the big reason full self-driving isn't available yet has nothing to do with "regulatory approval." The problem is that Tesla hasn't created the technology yet. Indeed, the company could be years away from completing work on it, and some experts doubt it will ever be possible to achieve full self-driving capabilities with the hardware installed on today's Tesla vehicles. "It's a vastly more difficult problem than most people realize," said Sam Abuelsamid, an analyst at Navigant Research and a former auto industry engineer. Tesla has a history of pre-selling products based on optimistic delivery schedules. This approach has served the company pretty well in the past, as customers ultimately loved their cars once they ultimately showed up. But that strategy could backfire hugely when it comes to Autopilot.
What happens when they start selling them and the courts find that all liability is with the software/hardware manufacturer?
Then the manufacturer will pay for insurance, rather than each individual paying for their own. It will just be built into the price of the car, but will be less expensive and more efficient than the current system because of better transparency and lower transaction costs.
Consumers will win, since they will save money and hassle. Car manufacturers will win since "no-insurance-needed" cars will sell better. Insurance companies will lose, since they will be selling to informed manufacturers (who may opt to self-insure) rather than to confused consumers.