Tesla opens the floodgates for owners to test self-driving


(Bloomberg) – Tesla Inc. makes its controversial driver assistance system available to customers who were previously not considered safe enough behind the wheel to test it.

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Chief Executive Officer Elon Musk tweeted that the system Tesla is calling the full self-driving beta is now available in North America to anyone who purchased the option and requested it through their car’s screen. So far, some paying customers have been denied access to the facility, known as FSD, because they didn’t score high enough on the metrics Tesla uses to determine insurance rates.

FSD was a lightning rod for criticism because the product did not meet Musk’s statements. He first announced his plans to sell it in October 2016, a few months after telling a tech conference that he viewed autonomous driving as “basically a problem solved.” In 2019, he said Tesla’s technology would advance to the point where no human would have to drive in about a year.

Those predictions have not come true: FSD still requires a fully attentive driver who keeps his hands on the wheel and is ready to take the helm at any moment. This disconnect exposes Tesla to increasing legal and regulatory risks:

  • The U.S. Department of Justice and the Securities and Exchange Commission are investigating Tesla’s self-driving claims, a person familiar with the matter said last month.

  • A California customer is seeking class action status for its lawsuit filed in September alleging that Tesla deceptively marketed its driver assistance systems.

  • The California Department of Motor Vehicles in August accused the company of misleading consumers about its FSD and Autopilot systems.

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It’s not clear if making FSD available to more customers will have any impact on Tesla production, or if it’s been “slightly harder” to generate more revenue after Musk recognized demand for its vehicles. The company has said it recognizes only a portion of the amount customers pay for FSD, with the remaining amount going into the balance of deferred revenue.

“The FSD purchase is not fully recognized in Tesla’s P&L because consumers purchased a promised product rather than a fully functioning product,” it said in a Nov. 14 note.

At the end of September, Tesla’s deferred revenue balance was $2.8 billion. While the company then said it expected to recognize $1.09 billion in deferred revenue over the next 12 months, Tesla downplayed the figure for years.

Musk has benefited from a relatively light-hearted approach to regulating self-driving technology in the US. The National Highway Traffic Safety Administration said in 2016, shortly before Tesla’s first fatal crash with Autopilot, that existing laws in the country created some barriers to driver assistance systems.

When asked in March when Europeans would test the FSD, Musk told fans that Tesla was opening a factory near Berlin that the company would shut down as regulators in the region allowed less.

“In America, things are legal by default,” Musk said. “In Europe they are illegal by default. So we have to get approval in advance, while in the US you can more or less do that yourself.

The National Highway Transportation Safety Board, which has no power to force automakers to follow its recommendations, has criticized Tesla’s use of Autopilot and FSD.

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“It’s basically the Wild West on our roads right now,” NTSB Chair Jennifer Homendy told Bloomberg earlier this year. “It’s a disaster waiting to happen.”

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