This past week, Tesla Motors [NASDAQ: TSLA] reached an important milestone, three billion miles driven. And according to Teslarati, "Tesla CEO Elon Musk took to Twitter to [also] announce that the company has logged nearly a quarter billion miles driven on Autopilot, adding valuable data to its fleet learning program. By comparison, Google has registered 1.5 million miles of self-driving through its Lidar-equipped test vehicles." Why is this important? "Tesla vehicles from around the world continue to work with one another on a shared vision of becoming fully autonomous one day while reducing risks associated with human error."
Above: Tesla's growing fleet is allowing the company to learn and improve (Source: TechCrunch)
Providing further context, "Tesla vehicles built since October 2014 log data from every mile driven, whether the car is operating in Autopilot mode or not. Even if an owner forgoes the purchase of Autopilot, the car still transmits wireless driving data directly to Tesla and into its cloud based machine learning network. By using data sourced from drivers in the real world, engineers at Tesla are able to continuously 'train' the vehicle’s algorithms to predict the types of objects around a vehicle, and with increasing levels of confidence."
Above: How Tesla Autopilot learns; mileage data as of June 2016 (Source: Mitch Turck)
Mitch Turck on Medium argues that no one can stop driverless cars and cites Tesla's progress as proof-positive change is coming: "Tesla actually uses your driving data to teach its Autopilot how to drive." Why does this matter? "Monumental leaps in vehicle safety will only accelerate, as most of the innovation now becomes a matter of short-cycle software upgrades (over-the-air, at that) which will become increasingly intelligent."
Above: Safety features rapidly improve with fleet learning (Source: Mitch Turck)
In addition to self-driving improvements, Tesla is well-positioned to pioneer its own car sharing solution as described by Elon Musk in his recent Master Plan: "You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you're at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost. Since most cars are only in use by their owner for 5% to 10% of the day, the fundamental economic utility of a true self-driving car is likely to be several times that of a car which is not. In cities where demand exceeds the supply of customer-owned cars, Tesla will operate its own fleet, ensuring you can always hail a ride from us no matter where you are."
Above: The virtuous cycle between electric vehicles, driverless cars, and car sharing (Source: Forbes via Chunka Mui)
Based on Musk's Master Plan, it appears Tesla has chosen an "in-house" solution for car sharing. And, with news of Tesla and MobileEye parting ways, Musk is looking to also bring Tesla's self-driving efforts closer to home. Looking at the tangled web of investment and partnerships (see infographic at bottom), it becomes clear that the major automotive players are heavily reliant on third-party solutions to solve the impending car-sharing + self-driving transformation within their respective companies. How important is this transformation to the industry? Check out what Morgan Stanley predicts...
Above: Morgan Stanley analyst, Adam Jonas, presents a fascinating look into "Shared Autonomy" (Source: Morgan Stanley; note: video opens in a new window)
So which car company is conspicuously absent from Bloomberg's infographic* below? That's right, Tesla Motors. In fact, Bloomberg notes, "carmakers R&D budgets jumped 61 percent to $137 billion from 2010 to 2014" to address the merging worlds of technology and cars. That said, without having to rely on others to do the heavy lifting, Tesla Motors can move faster, work smarter, and gain competitive advantage. In turn, this could allow Tesla an opportunity to win the technology arms race for the automotive industry's future.