Tesla blurs the line between driver assistance and fully self-driving cars

Meanwhile, the decision to blur together driver assistance and full self-driving capabilities makes it more difficult for Tesla to clearly communicate about the limits of its current driver-assistance technology. In the wake of last month's crash in Mountain View, Tesla has emphasized that drivers bear full responsibility for overseeing the operation of the Autopilot system—and need to have their hands on the wheel and their eyes on the road at all times.

Yet Tesla's official Autopilot webpage paints a very different picture. "Full Self-Driving Hardware on All Cars," the page boasts. Below that is a video of a Tesla driver cruising through a complex urban environment without touching the steering wheel.

Anupam Chander, a legal scholar at the University of California at Davis, argues that the mixed messages Tesla has been sending about Autopilot are "unbelievably irresponsible."

Tesla's story, of course, is that this headline and this video are referring to a future version of Autopilot that hasn't been released yet. But it's not hard to imagine how a customer might be confused. A customer might assume that "Full Self-Driving Hardware on All Cars" means that all Tesla cars have full self-driving capabilities. The distinction between hardware and software isn't obvious—especially since people aren't used to thinking about cars as computing platforms. Someone watching the video might naturally assume that it is showing the capabilities of current Tesla cars, since there's no disclaimer stating otherwise.

Tesla’s strategy of overselling might bite them here

A lot of Tesla's current difficulties can be traced back to the fact that Tesla is trying to sell self-driving cars using the traditional car industry business model. There's a reason a growing number of conventional car companies—including GM, Ford, Volkswagen, and Hyundai—are moving toward an on-demand rental model for their early self-driving cars.

But Tesla's unconventional sales tactics have made the problem worse. Tesla is still basically a cash-strapped startup. It has a history of not only setting optimistic deadlines for itself but raising capital by accepting advance payments from customers based on those optimistic deadlines. With all three of Tesla's recent cars—the Model S, Model X, Model 3—Tesla accepted millions of dollars in cash deposits from customers long before the cars were actually for sale.

In all three cases, Musk's initial production schedule proved too optimistic. That meant Tesla wound up holding on to customer deposits longer than they expected. These payments helped to finance the capital-intensive process of actually manufacturing the cars. But Tesla eventually managed to produce enough Model S and Model X vehicles to satisfy demand, and most customers were ultimately happy with their cars.

Aggressively pushing the envelope here is one of the ways Tesla has accomplished what many people thought was impossible a decade ago: building a totally new mainstream automaker from scratch.

"Tesla was basically the original Kickstarter," Abuelsamid told Ars. "They've been the only automaker that has gone out there and taken paid deposits from potential customers years in advance of the product becoming a reality. It's such a capital-intensive business that you would not be able to raise enough money to really get the company going" without using Tesla's aggressive fundraising tactics.

Tesla used the same basic approach in selling Autopilot. The company has been taking customers' money for a product that doesn't exist yet, while making unrealistic promises about when the technology will be ready. In June 2016, Musk predicted that the world was "less than two years away from complete autonomy."

Musk predicted in October 2016 that Tesla vehicles would be capable of full autonomy from Los Angeles to New York by the end of 2017.

But nearly two years later, there's little sign that Tesla is closer to full autonomy. Tesla began advertising (and accepting money for) the "full self-driving" feature in the fall of 2016. According to the Wall Street Journal, the move blindsided Sterling Anderson, then the head of Tesla's self-driving project. "This was Elon’s decision," he reportedly said when an employee asked about the move in late 2016. Anderson resigned from the project a couple of months later. Anderson's successor, Chris Lattner, only lasted six months in the position, and the company lost several other key managers and engineers last year.

While there are obvious similarities between pre-selling cars and pre-selling Autopilot, there's also an important difference.

When Tesla begins accepting pre-orders for a new car, it typically has a working prototype and a clear idea of the feature set. There's always uncertainty about how long it would take the company to ramp up production of the car, and the company has often been too optimistic. But there has never been too much doubt that Tesla would figure out how to produce a vehicle sooner or later.

In contrast, it's genuinely unclear how long it will take Tesla to develop a car with full self-driving capabilities—or if it's even possible to do so using the hardware Tesla has been shipping to people. This isn't just a case where the full self-driving feature might arrive a year or two late. There's a real question about whether Tesla can deliver the technology at all.

But at this point, Tesla has a strong incentive not to rethink its Autopilot strategy—at least not publicly. If the company were to admit that it made a mistake—for example, that it will need lidar to reach full autonomy—then it would have to deal with a lot of angry customers who paid $3,000 apiece for the full self-driving package. But as long as the company is continuing to work on the technology, however slowly, it can kick that can further down the road.

Tesla did not respond to multiple emails seeking comment for this story.