Everything There Is To Know About The Tesla Network

2 months ago by EVANNEX 27

Tesla Model S refresh

Tesla Model S

WHAT CAN WE EXPECT FROM THE TESLA NETWORK?

The revolution that will soon transform the world’s transportation system centers around four parallel and mutually-reinforcing trends: electrification, autonomy, connectivity and new ownership models.

Tesla

Teslas Supercharging

When it comes to megatrend #4 – new ownership models – the prime movers have been Uber and its competitors (such as Lyft), while ride-sharing services (Blue Solutions et al) and peer-to-peer rental networks (Turo) are adding new elements to the equation. However, Tesla, always among the first to exploit a new opportunity, has a plan to rule this segment of the new auto ecosystem as well.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris.

To the best of our knowledge, the Tesla Network was first mentioned in July 2016, as part of Tesla’s Master Plan, Part Deux:

When true self-driving is approved by regulators, it will mean that you will be able to summon your Tesla from pretty much anywhere. Once it picks you up, you will be able to sleep, read or do anything else en route to your destination.

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. This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla. 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.

Since then, we’ve heard little about it. That is surely not because Musk and company have forgotten about it, but rather because there are a couple of things that need to happen before it can become a reality.

First, Tesla vehicles will need to be upgraded to enable full autonomy. The National Transportation Safety Board (NTSB) ranks autonomy capabilities on a scale from 1 to 5.  All Tesla vehicles now being produced have the hardware necessary for full autonomy (Level 5), but current Autopilot software is basically at Level 2.

Elon Musk has promised a fully autonomous demonstration drive between California and New York by the end of this year and has predicted that Autopilot will offer Level 5 autonomy a couple of years from now.

Tesla

Levels of vehicle autonomy (Image: Intel)

The second piece of the puzzle that must fall into place is regulatory approval, and it’s anybody’s guess how long that could take. The process of navigating the alphabet soup of federal, state and local agencies presumably won’t even begin until Tesla has a Level 5 autonomous system ready for demonstration and testing.

When and if the Tesla Network is ready for business, how cool will it be? A recent article in Teslarati notes that it has the potential to radically change the way people get around. In a recent TED Talk, Elon Musk said that it will eventually be cheaper than public transport. That’s a bold claim, and it seems likely that it could only be realized once large numbers of people are using the network, bringing economies of scale into play.

Tesla

The virtuous cycle between electric vehicles, driverless cars, and car sharing (Source: Forbes via Chunka Mui)

For Tesla owners, participating in the Network could be a big opportunity. The average car sits idle in a garage or a parking lot 95% of the time – being able to monetize that dead time could add up to some substantial income. But will owners be interested in letting strangers ride around in their shiny new Teslas? Matthew DeBord of Business Insider is skeptical:

“Musk and his team are clearly thinking economically when they think about the Tesla Network. But they might not be thinking about how people really own cars – especially Teslas, which have around them a Ferrari-like halo of desirability.”

When Elon Musk announced the Tesla Network, he turned transportation providers such as Uber and Lyft from potential partners into competitors. In 2015, Uber’s then-CEO, Travis Kalanick, was quoted as saying that once Tesla offered fully autonomous cars, he’d buy all of them. Now it seems that’s not going to happen. The section of Tesla’s web site that deals with the Full Self-Driving Capability option contains this disclaimer:

“Please note that using a self-driving Tesla for car sharing and ride hailing for friends and family is fine, but doing so for revenue purposes will only be permissible on the Tesla Network.”

Tesla

Tesla may soon displace Uber (Image: London Institute)

As Tesla works on its walled garden, its potential competitors are not sitting idly by. Transport providers Uber and Lyft, automakers including Cadillac, Nissan, Audi and Volvo, and tech players such as Alphabet’s Waymo are all working on their own driverless technology. Whoever is the first to bring a driverless ride-sharing platform to market first will surely have a huge advantage, so it’s probably no exaggeration to describe what’s going on as an arms race. Tesla has a head start, with its fleet of Autopilot-equipped vehicles constantly beaming data back to the mothership, but will it succeed in making the Tesla Network the industry standard before its competitors catch up?

The pot of money to be claimed is potentially enormous, but one stock market observer believes that the California company has even more at stake. Morgan Stanley analyst Adam Jonas (via The Motley Fool) believes that, in order to justify its lofty stock market valuation, Tesla must build a leading autonomous mobility platform. “In our view, there’s only one market big enough to propel the stock’s value to the levels of Elon Musk’s aspirations: that of miles, data and content,” Jonas writes. “When does Tesla make the leap to mobility?”

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

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27 responses to "Everything There Is To Know About The Tesla Network"

  1. speculawyer says:

    I’d say the most important thing to know is that it is hypothetical and there will be many years before it becomes reality.

  2. Mister G says:

    To gas guzzling business winter is COMING

  3. Reijer says:

    Would love to drive a shared Model 3 if I have to make roadtrips or so. To open it with an app would be amazing

  4. HVACman says:

    In this regard, at least publicly, it would appear GM and Cruise Automation is ahead of Tesla, with all the autonomous Bolts running around SF and now actively picking up and dropping off Cruise employees anywhere in the City, using a summoning app. The driver is entirely in passive mode. It appears Cruise is way past Level 2 and almost at Level 3.

    1. Bacardi says:

      Apples to oranges, Cruze’s are not production ready, huge roof arrays of equipment and majority of the rear cargo area is occupied by computers…Also unknown are the costs, base Tesla’s model 3 will be around $45K…It’s fairly doubtful you’ll ever be able to buy a Gen1 Bolt EV with full autonomy, most likely will debut on a different GM EV…

  5. James P Heartney says:

    I keep hearing all this talk about Transport as a Service (Taas). Maybe it’ll become reality. Aside from the regulatory questions and the social question (whether actual humans will be willing to move to trusting their day-to-day transport to an autonomous network), the part that I wonder about is whether Level 4 or 5 autonomy is even possible using the current AI strategy (i.e. enhanced expert systems).

    Right now there’s a mega-f-ton of money riding on a positive answer to this question. Uber, Lyft et al are running stopgaps (relying on private contractors and hoping they don’t figure out how badly they are being screwed). Alphabet, Tesla, and various car companies are itching to jump in. But at the moment, there are zero working prototypes of an actual Level 4 or 5 vehicle that can drive on general roads in all weather.

    Musk wants to achieve true autonomy using the hardware already in current Teslas. This means no use of Lidar or equivalent – all the data has to come in visually, and be processed in real time. This is quite a bit harder than relying on an active imaging system like Lidar, but means the hardware can be built into a current production model car, and the software added later.

    I think this, creating usable autonomous capability, is the most difficult piece of the pie (which is saying something; the regulatory piece may be a nightmare). I hope it works out. But as they say, it’s the last few percents of a major software project that are the hardest.

    1. speculawyer says:

      “This means no use of Lidar or equivalent – all the data has to come in visually, and be processed in real time.”

      thats not true, they have some ultrasonic sensors & radar. I dont know if that will be enough but it is much more that just visual light camera systems!

      1. Pushmi-Pullyu says:

        The ultrasonic sensors are useless at any difference in speed faster than that you’d find in a parking lot.

        And only the front-facing radar has any range to speak of. I’m astonished that Tesla calls the diagonally mounted front radars “long range” when they only function out to, hrm, 15-20 feet or so? Autopilot needs reliable detection out to at least 100 yards, to give the car enough reaction time to be able to maneuver or brake to avoid an accident. And forward-facing active scanners should have even longer range, perhaps 150-200 yards.

        Let’s recall that the one and only confirmed fatal crash in a Tesla car operated by Autopilot was a result of the failure of optical object recognition software to distinguish between the side of a semi trailer painted white, and the “brightly lit sky”. If Autopilot used active scanning to the sides, and not just to the front, then Autopilot wouldn’t have been confused in that manner. Active scanning would have detected that trailer as a solid object rapidly approaching on an intersect course.

        Those who say that fully autonomous cars can depend on cameras and optical object recognition software… well, let’s just say they are ignoring some pretty compelling evidence.

  6. Pushmi-Pullyu says:

    Perhaps it’s just a sign I’m now an old fogey who’s stuck in the past, but I just can’t see many people giving up the freedom of having your own car available anytime you need it.

    I don’t think these ride-sharing services will have any bigger impact on individual car ownership than Air BnB does on the hotel business. Air BnB does have a lot of happy customers, but it hasn’t had a noticeable impact on the number of hotel rooms rented every night!

    “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.”

    Yeah, and you could wear out your car several times as fast by renting it out every day to strangers, too!

    1. Brandon says:

      Don’t forget that in many states, if you rent out your car, and a crime is committed with it, your liable, and can be charged as an accessory to the crime.

      When people figure that out, that will put the brakes on ride sharing really quickly. Drug runners are going to move drugs, what happens if they do it in your rented out car? Your going to jail for dealing.

    2. speculawyer says:

      It could also be a sign of your wealth. Many would love a car but cant pay for car, insurance, parking, fuel, maintenance, etc.

      1. Pushmi-Pullyu says:

        Paying for a taxi twice a day, to take you to and from work, would be even more expensive.

        That’s why it’s said that “America is a land where even the poor own automobiles.” While that’s true, it ignores the reality that most of the working poor have to own a car, if they want to get to work and back every day.

        In most places people live in Europe, owning a car is a luxury, because they have excellent mass transit systems that go everywhere, even regular bus service to small towns. Contrariwise, in most places people live in the USA, a car is a necessity, at least for those with full-time jobs.

        And I doubt that either these “ride-sharing” services or autonomous taxi services are going to change the financial reality that much. About the third time you call up your boss and say that you can’t get to work on time because the ride-sharing car you expected to show up that morning, didn’t… he’ll tell you that you don’t need to come to work anymore.

    3. John Ray says:

      Does anyone want to rent my brown shoes and belt? They are at home today as I choose to wear black. If you would like to rent my brown shoes and belt it will raise their economic utility.

      Nope, don’t see any problems with this model.

    4. M Hovis says:

      Though I have little doubt this future model will work, I’m with you Pushi. I just can’t let go of renting my car for the reasons you discussed as well as others especially until the newness wears off.

    5. MaartenV-nl says:

      I have a car and an apartment.
      Uber is not going to replace my car and AirBNB is not going to replace my apartment.

      I might use Uber or AirBNB when I am abroad.

    6. James P Heartney says:

      Pushmi, we’ve had this discussion. I think you are right that most folks won’t want to get into the car hire business with their own vehicle. But I also think it’s at least possible that, if you have workable Level 4/5 autonomy, large ride services will spring up, and plenty of people will use them if they are cheaper/easier than owning a car (which they should be).

      In our case, we might keep a personal car around for a while till we are sure the ride shares are reliable. Our teen daughters, OTOH, have no real interest in driving, and would be very happy never to have to do it. Nor, as college students/young professionals would they want to deal with car ownership.

      1. Pushmi-Pullyu says:

        James, I wasn’t exhibiting false modesty when I kicked off this sub-thread by saying “Perhaps it’s just a sign I’m now an old fogey who’s stuck in the past…” I do realize it’s entirely possible I’m blind to a coming shift in our culture.

        I know a lot of people have said that the younger generation isn’t interested in car ownership; that they don’t see it as something worth working toward, as my generation (I grew up in the 50s-60s), and the generation following, did. I have always seen that as a “sour grapes” attitude; a reflection of the way the middle class is shrinking, disappearing into the working poor. That is, that the younger generation simply can’t afford to own their own cars, but rather than admit (even to themselves) that it’s beyond their means, they rationalize the situation by claiming they don’t want their own car.

        But your comment does cause me to pause and reconsider. Perhaps the younger generation really does not value the personal freedom to travel anywhere, anytime as much as previous generations did.

        With a growing amount of time being spent online and staring at their smartphones, maybe youngsters these days simply don’t care that much about where their physical body happens to be at any moment.

    7. Nick says:

      I would love the freedom to not have to own a car. My cars own me.

      Dealing with cars is a major drain on my resources which sit idle most of the time. It’s an insanely wasteful system today which is ripe for improvement.

      If they were connected to the smart grid and earning me something that way, at least if be able to tell myself a story.

  7. super390 says:

    The vultures are circling around Uber in its current form. Too many customers complaining about the drivers, too many drivers complaining about the fares. Unfortunately, the business solution is not to sacrifice profits to obtain better drivers. It is to sacrifice the drivers and keep all the profits.

    The upside is that if Uber, Lyft and Tesla all move towards autonomous taxis at the same time, it will be hard for the public to ignore. The investors will stampede and the mainstream car industry will face the end of its entire model.

    The downside, as always, is how the fares will be divided up. Tesla is pushing for an owner-serviced robot backed up by Tesla’s services. Which is greatly enhanced by having only one brand of car to be monitored and serviced. Uber and Lyft can’t offer that to its drivers because they drive many different kinds of cars with what will be many different kinds of autonomy solutions. Those firms can only do it by owning the fleet themselves and keeping it standardized.

    But we don’t know for sure which model – owner-owned or fleet-owned – will produce the better outcome. There’s still too much we don’t know about the creative new ways in which riders will damage robot cars.

  8. vdiv says:

    This is really annoying. “From my charger’s dead, cold hands!” as Eric Garcetti proclaimed.

  9. Rad says:

    Call me old fashion, but… if I paid $50,000 for a Model 3 or much more for a Model S, ain’t no way I’m letting a stranger behind the wheel. Or even a close friend.

    1. rc368 says:

      I felt the same way when my 2014 Volt was spanking. But now? I’d be happy as heck if someone paid us to ride around in our old car with 60k miles on it. Alas, it is a dumb car. But, I’m thinking I’ll go through the same curve with our December M3’s. Making me think I’ll actually take the two I reserved, instead of just taking one.

  10. Steve G says:

    People have been renting out their cars on Turo and Getaround for over five years. Both services offer hundreds of cars, and several states including CA and OR have passed insurance reform that legally indemnified the owners from liability claims in the event of an accident. And guess what? There are Teslas in both networks. And Audis, Porsches, Lexuses… and lots of Toyotas and Hondas. Participating owners in the SF Bay Area (some of whom list multiple cars and participate as a business venture) net over $400 a month.

    So just because YOU wouldn’t do it, doesn’t mean others won’t. You probably wouldn’t rent out your home on Airbnb either, but they now rent out more rooms every night than Hilton Hotels.

    The world is changing, and the Tesla could end up surprising a lot of naysayers with the Tesla Network. That seems to keep happening with Tesla…

    1. Pushmi-Pullyu says:

      Hmmm, it appears I was wrong about Airbnb (I see that’s the correct spelling) not being popular enough to have a measurable impact on the hotel industry. Thank you for the information (or correction), Steve!

      Kinda undercuts my whole argument, so perhaps I shouldn’t be so sure most people won’t rent out their cars to strangers.

      https://qz.com/329735/airbnb-will-soon-be-booking-more-rooms-than-the-worlds-largest-hotel-chains/

  11. James P Heartney says:

    One thing to remember about the idea that customers will trash the autonomous vehicles they ride in: the cars will have video eyes on the passengers for the whole trip, and the company will have their credit card number. Poorly behaved passengers could be charged for leaving trash, and willful damage repairs will be chargeable too. If passengers want to dispute it, there’ll be video of them causing the damage.

    1. rc368 says:

      And they’ll be kicked off the network for bad reviews, like uber+.

    2. Pushmi-Pullyu says:

      I wouldn’t be that concerned about intentional vandalism, for the very reason you mention.

      But I would be concerned about people getting drunk and throwing up in the back seat. A couple of cases of that, and the smell inside your car won’t be so “fresh” anymore. People getting drunk and then calling a cab (or a ride service) to go home is pretty common, so I wouldn’t think that throwing up in the back seat is all that rare for such services.

      Or, in general, riders simply not being as careful with the car as the owner would. Not that many people are vandals, but plenty are slobs.

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