A recent interview by Tesla CEO and founder Elon Musk gives an important clue as to the makeup of the forthcoming Model 3. It seems that Musk considers Tesla providing an example to other auto manufacturers in the provision of autonomous driving is important to the future of the company.

Tesla Motors TSLA

Tesla toiling to deliver autonomous tech

It is known that Tesla has been working on this technology internally for some time. But it now seems that the founder of Tesla intends to accelerate the production of autonomous driving so that it can be included at the launch of its lower-cost Model 3 electric car. And the latest reports on the subject suggest that autonomous driving technology may be as close as just two years away.

Musk spoke recently to Fortune during a visit to SpaceX headquarters; another innovative business that Musk has invested in heavily. “We’re going to end up with complete autonomy,” Musk commented, “and I think we will have complete autonomy in approximately two years.”

This represents a significant shift forward in the timeline for the delivery of autonomous driving. Previously it was suggested that Tesla could deliver this technology in roughly 5 to 6 years. And the founder and CEO of the company has always been careful to emphasize that it could take additional years for regulators to approve the technology, even once it becomes technically feasible.

Yet Musk is increasingly encouraged about the potential of this technology, and the capabilities of Tesla to even conceivably include it in the Model 3. Tesla has already sought out hardcore software engineers on twitter, with the intention of ensuring that its “generalized full autonomy” is made a “super high priority.”

Lower price point

The Model 3 will be an absolutely critical vehicle for Tesla, as its lower price point of $35,000 ensures that it will be the first truly mass-market vehicle that the electric car manufacturer has produced. Certainly the early Tesla releases were considered niche vehicles, but with the company having established itself as a multi-billion dollar competitor in the auto marketplace, more populist cars are now in the offing.

Although there are no guarantees about the release date of the Model 3, it is generally assumed that this vehicle may appear in the latter months of 2017. This could enable Tesla to deliver the autonomous driving hardware in the Model 3, as Musk suggests that the tech is currently operating within a similar timeframe.

In addition, Tesla has typically been forced to push its vehicle releases back, owing to the sheer complexity of manufacturing a roadworthy electric car. If this were the case with the Model 3, it would mean that including the autonomous driving technology would become even more feasible.

On the other hand, Tesla unquestionably needs to consider logistical issues with the Model 3 as well. Above all else, this is intended to be a low-cost vehicle, with the mass-market very much a target for the corporation. The inclusion of autonomous driving could, and almost certainly would, ramp up costs considerably, so Tesla must consider this within the overall vehicular equation.

One possible approach for Tesla would be for the company to produce several different variants of the Model 3, and then offer consumers of the vehicle numerous purchasing options. It may be that autonomous driving is included in the Model 3, but not the base unit, and that consumers need to shell out more than $35,000 in order to purchase an autonomous Model 3 variant.

Regulatory problems

It is also important to note that the regulatory conundrum that Tesla faces is unlikely to be solved by the time that the Model 3 is released. Musk believes that it will take an additional year for regulators to determine that the technology is satisfactorily safe, and the CEO of Tesla even anticipates that this process could even take half a decade or more in some jurisdictions.

Tesla already has a reputation for producing safety-first vehicles, and the introduction of autonomous technology would theoretically contribute to this image. Tesla is already well ahead of any other auto company in terms of producing vehicles with autopilot abilities, with the company having already manufactured driver assisted tech that has received critical acclaim. However, achieving the results with autonomous driving that Musk envisages will be a massive challenge for the corporation, and to complete this process in nearly two years is certainly an optimistic estimate, even for the ever-bullish CEO.

Nonetheless, Musk believes that once the autonomous technology is implemented in the Model 3 that there will be a low probability of accidents. The CEO of Tesla also believes that the reduction of road incidents will play a major role in regulators approving the technology. “The point at which it becomes statistically clear that an autonomous car is safer, I think, regulators will be comfortable with allowing it,” Musk asserted.

Meanwhile, aside from the comments of Musk, analysts elsewhere are predicting that the Model 3 may arrive at a higher price point than initially anticipated. It is noted that the supply of used Tesla vehicles is steadily increasing in price, with ever more ambitious specifications being included within them. The Model S also launched at a higher price point than was expected at one time, and this could give indication regarding the future pricing of the Model 3.

If the Model 3 does indeed debut at $35,000, this is extremely likely to be for the most base of base units. Consumers wanting dual-motors, longer-life batteries, and indeed the mooted autopilot, will more likely end up paying $45,000, or even in excess of this figure. What features the $35,000 model would possess remains to be seen, but certainly those wanting autonomous driving included in their Model 3 would need to make a premium financial investment.

Nonetheless, as Tesla continues to work on the Model 3, it sounds as if it will be a unique vehicle in technology terms.


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