Tesla's gives an update on its upcoming more affordable vehicle
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The third-quarter earnings call for Tesla offered intriguing insights into the direction and focus of the company's upcoming next-gen vehicle, dubbed the Model 2 or the $25,000 car.
While drawing on a comparison to Cybertruck's production challenges, Elon Musk declared this vehicle will be more conventional for production with the overarching goal of achieving an unmatched level of manufacturing efficiency.
Functional Beauty: The Aesthetic Vision
The next-gen car is predicted to be the most produced car in Tesla's lineup, with the potential scale and reach of the Model 2, with implications suggesting it could match the combined volume of other Tesla models. The "high-volume, low-cost" will be simpler in design and technological features to achieve a production speed unprecedented in the auto industry. The mention of achieving "units per minute level that is unheard of" paints a picture of Tesla's commitment to scale and affordability.
Breaking away from the enchantment often associated with Tesla vehicles, Musk set the stage for a different kind of vehicle in the Model 2. Described as "utilitarian," this new vehicle won't be about enchanting consumers but serving a functional purpose. Despite this, Musk reassured that the car will still bear Tesla's signature beauty.
The Quest for Affordability
A dominant theme throughout the call was the relentless push towards reducing costs and improving operational efficiencies. Vaibhav Taneja, Tesla's Chief Accounting Officer, pointed out the myriad challenges and variables in managing product margins, especially given the ongoing factory upgrades.
Nevertheless, company representatives remain unwavering in their dedication to cost reductions for 2024, showcasing Tesla's commitment to affordability. As Taneja describes, this "cost attack" strategy involves meticulous examination and improvement of every line item, highlighting Tesla's dedication to affordability at every turn.
Musk equated their cost-reduction strategy to a "Game of Thrones" where even saving pennies mattered. Musk highlighted the importance of such savings, highlighting how even small elements, like unnecessary internal stickers or QR codes, are being scrutinized for their contribution to the vehicle's cost.
Driving down the costs for the Model 2 isn't just about large-scale production adjustments; it's about scrutinizing every tiny detail. Musk illustrated the cost anatomy of a vehicle, emphasizing the challenge of saving even $0.40 on each of the approximately 10,000 parts in a car.
What This Means for Model 2
All these cost-saving strategies are directly tied to Tesla's aspiration to introduce the Model 2 at an unprecedented price point. By focusing on "pennies" and being "ruthless" in their cost-cutting measures, Tesla is gearing up to deliver a vehicle that doesn't just promise efficiency and sustainability but also unparalleled affordability.
The road to the Model 2 is evidently layered with challenges. Still, if there's one takeaway from the earnings call, it's that Tesla is more committed than ever to making the dream of an affordable electric vehicle a reality for the masses.
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Tesla appears to be preparing to expand its Robotaxi geofence in Austin, Texas, with numerous engineering vehicles taking to the road. One of the most interesting sights, between the short and tall LiDAR rigs, was a Cybertruck validation vehicle, which we don’t often see.
Tesla’s expansion is moving the Robotaxi Network into downtown Austin, a dense urban environment that is currently outside the geofence. It appears Tesla is content with the latest builds of Robotaxi FSD and is ready to take on urban traffic.
The inclusion of a Cybertruck in the validation fleet is noteworthy, as the rest of the vehicles are Model Ys. This suggests that Tesla may be addressing two challenges simultaneously: expanding its service area while also addressing the FSD gap between the Cybertruck and other HW4 Tesla vehicles.
Tesla Validating Downtown Austin before expanding the Robotaxi geo-fence area. pic.twitter.com/ylFATtjcDi
Recent sightings have shown a fleet of Tesla vehicles, equipped with rooftop validation sensor rigs, running routes throughout downtown Austin and across the South Congress Bridge. While these rigs include LiDAR, it’s not a sign that Tesla is abandoning its vision-only approach.
Instead, Tesla uses the high-fidelity data from the LiDAR as a ground truth measurement to validate and improve the performance of its cameras. In short, it essentially uses the LiDAR measurements as the actual distances and then compares the distances determined in vision-only to the LiDAR measurements. This allows Tesla to tweak and improve its vision system without needing LiDAR.
This data collection in a new, complex environment right outside the Robotaxi geofence is an indicator that plans to expand the geofence. Tesla has previously indicated that they intend to roll out more vehicles and expand the geofence slowly. Given that their operational envelope includes the entire Austin Metro Area, we can expect more locations to open up gradually.
Once they expand the operational radius to include downtown Austin, they will likely also have to considerably increase the number of Robotaxis active in the fleet at any given time. Early-access riders are already saying that the wait time for a Robotaxi is too long, with them sometimes having to wait 15 minutes to be picked up.
With a larger service area, we expect Tesla to also increase the number of vehicles and the number of invited riders to try out the service.
After all, Tesla’s goal is to expand the Robotaxi Network to multiple cities within the United States by the end of 2025. Tesla has already been running an employees-only program in California, and we’ve seen validation vehicles as far away as Boston and New Jersey, on the other side of the country.
Cyber FSD Lagging Behind
One of the most significant details from these recent sightings is the presence of a Cybertruck. Cybertruck’s FSD builds have famously lagged behind the builds available on the rest of Tesla’s HW4 fleet. Key features that were expected never fully materialized for the Cybertruck, and the list of missing features is quite extensive.
Start FSD from Park
Improved Controller
Reverse on FSD
Actually Smart Summon
It may not look like a lot, but if you drive a Cybertruck on FSD and then hop in any of the rest of Tesla’s HW4 vehicles, you’ll notice a distinct difference. This is especially evident on highways, where the Cybertruck tends to drift out of the lane, often crossing over the lane markings.
Tesla was testing parts of Downtown Austin, TX with this Cybertruck which had a massive roof rack, and sensors.
We previously released an exclusive mentioning that a well-positioned internal source confirmed with us that a new FSD build for the Cybertruck was upcoming, but we never ended up receiving that particular build, only a point release to V13.2.9. The AI team’s focus had clearly shifted to getting the latest Robotaxi builds running and validated, and while a flagship, the Cybertruck fleet was small and new, and really a secondary task.
The Cybertruck’s larger size, steer-by-wire, rear-wheel steering, and different camera placements likely present a bigger set of challenges for FSD. Deploying it now as a validation vehicle in a complex environment like downtown Austin suggests that Tesla is finally gathering the specific data needed to bring the Cybertruck’s capabilities up to par. This focused effort is likely the necessary step to refine FSD’s handling of the Cybertruck before they begin rolling out new public builds.
When?
Once Tesla’s validation is complete, we can probably expect the Robotaxi Network to expand its borders for the first time in the coming days or weeks. However, we’ll likely see more signs of the expansion, such as Robotaxi vehicles driving themselves around the area, before the expansion actually happens.
Hopefully, the Cybertruck will also learn from its older siblings and receive the rest of its much-needed FSD features, alongside an FSD update for the entire fleet.
Tesla is rolling out a fairly big update for its iOS and early-access-only Robotaxi app, delivering a suite of improvements that address user feedback from the initial launch last month. The update improves the user experience with increased flexibility, more information, and overall design polish.
The most prominent feature in this update is that Tesla now allows you to adjust your pickup location. Once a Robotaxi arrives at your pickup location, you have 15 minutes to start the ride. The app will now display the remaining time your Robotaxi will wait for you, counting down from 15:00. The wait time is also shown in the iOS Live Activity if your phone is on the lock screen.
How Adjustable Pickups Work
We previously speculated that Tesla had predetermined pickup locations, as the pickup location wasn’t always where the user was. Now, with the ability to adjust the pickup location, we can clearly see that Tesla has specific locations where users can be picked up.
Rather than allowing users to drop a pin anywhere on the map, the new feature works by having the user drag the map to their desired area. The app then presents a list of nearby, predetermined locations to choose from. Once a user selects a spot from this curated list, they hit “Confirm.” The pickup site can also be changed while the vehicle is en route.
This specific implementation raises an interesting question: Why limit users to predetermined spots? The answer likely lies in how Tesla utilizes fleet data to improve its service.
Here is the new Tesla Robotaxi pickup location adjustment feature.
While the app is still only available on iOS through Apple’s TestFlight program, invited users can download and update the app.
Tesla included these release notes in update 25.7.0 of the Robotaxi app:
You can now adjust pickup location
Display the remaining wait time at pickup in the app and Live Activity
Design improvements
Bug fixes and stability improvements
Nic Cruz Patane
Why Predetermined Pick Up Spots?
The use of predetermined pickup points is less of a limitation and more of a feature. These curated locations are almost certainly spots that Tesla’s fleet data has identified as optimal and safe for an autonomous vehicle to perform a pickup or drop-off.
This suggests that Tesla is methodically “mapping” its service area not just for calibration and validation of FSD builds but also to help perform the first and last 50-foot interactions that are critical to a safe and smooth ride-hailing experience.
An optimal pickup point likely has several key characteristics identified by the fleet, including:
A safe and clear pull-away area away from traffic
Good visibility for cameras, free of obstructions
Easy entry and exit paths for an autonomous vehicle
This change to pick-up locations reveals how Tesla’s Robotaxi Network is more than just Unsupervised FSD. There are a lot of moving parts, many of which Tesla recently implemented, and others that likely still need to be implemented, such as automated charging.
Frequent Updates
This latest update delivers a much-needed feature for adjusting pickup locations, but it also gives us a view into exactly what Tesla is doing with all the data it is collecting with its validation vehicles rolling around Austin, alongside its Robotaxi fleet.
Tesla is quickly iterating on its app and presumably the vehicle’s software to build a reliable and predictable network, using data to perfect every aspect of the experience, from the moment you hail the ride to the moment you step out of the car.
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