Muskspeak on Cybertruck, Price Cuts, FSD Timing as Tesla Hits New Records in Q2

  • The US remains the top market for Tesla followed by China and Europe.
  • Aiming to develop an in-house AI ecosystem, Tesla has started building its own Dojo training supercomputer.
  • With this growth trajectory, Tesla is expected to achieve sales of around 1.9 million units by the end of 2023.

Tesla achieved remarkable results in Q2 2023, with its revenue growing 47% YoY to reach the record-breaking figure of nearly $25 billion. The company’s vehicle deliveries too hit a record at 466,915, growing 83% YoY. The US retained its position as Tesla’s largest market, contributing to 37.6% of the total sales, while China and Europe followed closely behind. Global price cuts for the Model Y and Model 3, along with tax subsidies in the US and China, were two of the biggest drivers for Tesla’s Q2 sales.

Tesla CEO Elon Musk, during the earnings call, discussed a few key things like the long-awaited Cybertruck deliveries, Tesla’s advantage in competitive pricing of vehicles and the possibilities of attaining complete FSD:

Cybertruck delivery outlook

CEO:  “Demand is so – so far, off the hook, you can’t even see the hook. So, that’s really not an issue. I do want to emphasize that the Cybertruck has a lot of new technology in it. Like a lot… So, always very difficult to predict the – the ramp initially, but I think we’ll be making them in high volume next year, and we will be delivering the car this year.”

Soumen Mandal’s analyst take: “Musk is certainly hyping the Cybertruck, not that it needs to anymore, but there is also significant expectation setting with discussions on internal production and supply chain hurdles. Is this another Model Y? That’s a tough act to follow, but the Cybertruck does bring a slew of unique parts and processes. So, longer term, we expect to see another products flywheel off from it.

Tesla’s price cuts for its vehicles

CEO:  “And we, you know — we just — we just course according to what the mood of the of the public is, you know. Buying a new car is a — it’s a big decision for vast majority of people. So, you know, anytime there’s economic uncertainty, people generally pause on new car buying, at least to see to see what happens.

And, you know — and then, obviously, another challenge is the — the interest rate environment. As interest rates rise, the affordability of anything bought with that decreases, so effectively increasing the price of the car. So, when interest rates rise dramatically, we actually have to reduce the price of the car because the — the interest payments increase the price of the car. So — and this is at least — at least up until recently was to believe the sharpest interest rate rise in history. So, we had to do something about that. And if someone’s got a crystal ball for the global economy, I really appreciate it. If I could borrow that crystal ball.”

Soumen Mandal’s analyst take: “Tesla’s strong supply chain and reduced cost of production due to low raw material cost, especially for lithium, has encouraged the company to reduce prices of its vehicles. Alongside what Musk described as ‘interest rate rises’, Tesla’s price reduction has made all variants of the Model 3 and Model Y eligible for IRA tax credit in the US, where it will benefit in the long term. So, macroeconomic policies and geopolitical relations play a crucial role in deciding such price reductions, incentives or discounts.”

Autonomy (FSD): Timing

CEO:…the reason I’ve been optimistic [on achieving full self-driving] is what it tends to look like is the — we’ll make rapid progress with the new version of — of FSD. But — but then, it will curve over logarithmically. So — so, at first, like, a logarithmic curve looks like, you know, just sort of fairly straight upward line, diagonally up. And so, if you extrapolate that, then you — you have a great thing. But then because it’s actually logarithmic, it curves over. And then, there have been a series of logarithmic curves. Now, I know I’m the boy who cried FSD, but man, I think — I think we’ll be better than human by the end of this year.”

Abhik Mukherjee’s analyst take: “Almost every auto OEMs are spending on autonomy. Tesla is also walking in the same direction and is building an in-house AI service that includes in-house real-time data sets, neural Net training, vehicle hardware and software. Tesla is expecting to reach perfect FSD soon and for this, it is also building a Dojo supercomputer. Early development of FSD will give Tesla a massive first-mover advantage over its competitors. We assume Tesla FSD might also get adopted by other automakers, like Tesla NACS is being adopted.”

Autonomy (FSD): Disruption

CEO:  “It’s not about getting more share. It’s just that you can think of every car that we — that we sell or produce that — that — that has a full Autonomy capability as actually something that, in the future, may be worth as much as five times what it is today…If you’ve got an autonomous — if that vehicle is able to operate autonomously and — and use — be used in either dedicated or autonomous or partially autonomous like — like, Airbnb, like maybe sometimes you allow your car to be used by others, sometimes you want to use it exclusively, just like, you know, Airbnb, you know, doing Airbnb with a room in your house… So, I think it’s sort of it would be — I think it — it does make sense to sacrifice margins in favor of making more vehicles because we think, in the not-too-distant future, they will have a dramatic valuation increase. I think the Tesla fleet value increase to the point at which we can upload full self — you know, full self-driving and it’s approved by regulators, will be the single biggest step change in asset value maybe in history.”

Abhik Mukherjee’s analyst take: “Although we are excited about autonomous vehicles, Tesla currently is a bit far from achieving perfect FSD. Incidents involving Tesla vehicles are frequently reported. Currently, Tesla FSD is only available in the US and it will need a lot of approvals from regulators to ensure 100% safety before it can be rolled out to other regions, especially in Europe where regulations are much stricter. Though achieving complete FSD could disrupt the market in future, currently Tesla must work to make its FSD software incident-free.”

Tesla Q2 2023 revenue by segment

Financial highlights

  • In the automotive segment, Tesla achieved revenue of $21.26 billion, an annual growth of 7%. Around 4% of this revenue was derived from sales of regulatory credits and automotive leasing.
  • In addition to the automotive segment, Tesla experienced significant growth in its other businesses, such as energy generation and services, with revenues surging by 57% YoY to reach $3.65 billion in Q2 2023. Tesla deployed 7 GWh of energy storage and 66 MWh of solar panels during the quarter.
  • Tesla achieved a gross profit of $4.53 billion, a 7.1% YoY increase. High vehicle deliveries, low cost of production due to lower raw material costs and IRA tax credits for EVs in the US contributed to this result. But the low ASP of vehicles due to the voluntary global price cuts also hurt Q2 profitability.
  • Tesla’s Q2 operating profit was 62%, a decline of 1.8 percentage points sequentially. The reduction can be attributed primarily to the significant expenses incurred in ramping up the production for Cybertruck, Tesla’s in-house 4680 cells and the development of AI through its Dojo training computer. Other additional costs were associated with a new ‘Get to Know Your Tesla’ UI and facelifts for the Model 3 and Model Y.

Tesla Q2 2023 production and deliveries


With the current growth trajectory, we expect Tesla deliveries will reach around 1.9 million by the end of 2023. Its robust supply chain and vertically integrated production have given Tesla a competitive advantage.

Other growth opportunities are arising from the adoption of Tesla’s NACS charging standard by several OEMs including Ford, GM, Rivian, Volvo, Polestar and Nissan for the North American market. This allows these auto companies to leverage Tesla’s extensive network of charging stations across North America, enhancing the convenience and accessibility of electric vehicle charging for their customers. But it also gives Tesla the option to increase its revenue by charging licensing fees from OEMs adopting its proprietary NACS ports.

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u-blox Marks 25 Years With Record-breaking Revenue, Strong Growth Across All Segments

  • u-blox’s total revenue grew 44% YoY in 2022 to reach $654 million.
  • The company shipped more than 100 million chipsets and modules in 2022.
  • u-blox’s revenue is expected to grow more than 15% YoY in 2023.

Last year saw u-blox’s 25th anniversary, and the company marked the occasion in style, registering a record-breaking revenue of $654 million in 2022, an increase of 44.3% from 2021. Despite supply chain challenges, u-blox managed to fulfill customer demands with a diversified supplier base. The company experienced strong growth across all segments and regions.

Highlights for 2022

  • u-blox’s operating profit increased 258% YoY in 2022 to reach $138 million, demonstrating improved operational efficiency.
  • The mass adoption of high precession technology in industrial automation, delivery robots, autonomous construction and agricultural equipment helped its industrial segment to grow 52% YoY and capture 63% of the company’s total revenue.
  • The automotive segment also grew 54% YoY due to the increased demand for navigation and infotainment applications, driven by the shift towards electric vehicles. The segment contributed 28% to the total revenue.
  • The consumer segment grew 34% YoY and captured 9% of the total revenue.
  • Among regions, the revenue from APAC increased 59% YoY propelled by high demand for various applications such as infotainment, navigation, telematics and healthcare, particularly in Japan, Australia and New Zealand. In EMEA, the revenue grew by 43% driven by the strong performance of infotainment, navigation, industrial automation and asset-tracking applications. Similarly, the revenue in the Americas grew 48% YoY fueled by the robust growth of infotainment, navigation, telematics and healthcare applications.
  • In 2022, modules and GNSS chips contributed 79% and 20% of the total revenue respectively. The company shipped more than 100 million modules and chips combined in 2022.

u-blox 2022 financial performance

GNSS modules

u-blox is maintaining its leadership position in the GNSS module market due to its superior quality and high precision. In 2022, u-blox’s GNSS module shipments grew by 28% YoY, contributing more than half of the total module revenue. These modules are widely used in automotive and industrial applications. To further enhance its positioning solutions, it has formed partnerships with GMV to provide end-to-end safe positioning solutions for autonomous vehicles. Additionally, u-blox has secured multiple design wins, including with NXP semiconductor, NVIDIA and Li-Auto, for its ZED-F9K GNSS module for automotive applications.

Wi-Fi/BT modules

In 2022, u-blox’s Wi-Fi/BT module segment experienced a 17% YoY growth, generating a revenue of nearly $57 million. The widespread adoption of Wi-Fi 6 in healthcare and industrial applications has played a significant role in the segment’s growth. Besides, u-blox’s partnership with AWS has created two innovative modules that are pre-provisioned for secure communication with AWS via Wi-Fi and cellular IoT, simplifying access to cloud services for customers. This collaboration with AWS is expected to drive the adoption of u-blox’s high-quality modules targeted at the industrial segment, increasing the company’s market share and revenue growth potential.

Cellular IoT modules

According to Counterpoint Research’s Cellular IoT Module Tracker Service, u-blox’s cellular IoT module segment grew by 37% YoY in 2022, reaching $176 million. The launch of new products in the first half of the year played a crucial role in this growth, with its smallest 4G Cat 1 modules shipping one million units within two months of launching. Its UBX-R5 LPWA chipsets are also gaining traction among customers. In the cellular LPWA chipsets market, u-blox is competing with major players such as Qualcomm, Sony and Sequans. Sony’s latest 5G LPWA chipset may create further competition for u-blox.

GNSS chips

u-blox shipped nearly 54 million GNSS chips in 2022, which contributed $131 million in revenue. The u-blox 8 series chipsets continue to be the top-selling chipset, while the new M10 chipsets are ramping up production at a rate of one million per month. Nofence is leveraging u-blox GNSS chipsets to develop GNSS-enabled livestock collars for regenerative farming.


The company’s future strategy is to continue to lead with innovative solutions that combine chipsets and modules with services while considering socio-economic and eco-friendly factors. The ongoing adoption of electric and autonomous vehicles will be a major growth opportunity for u-blox.  With a strong order book in place, u-blox is forecasting a substantial YoY revenue increase of 6% to 16% for 2023. The average analyst estimate for the 2023 revenue is $724 million, representing an 11% increase. Considering the high demand and interest for its products in the automotive, industrial and asset-tracking segments, it is probable that u-blox’s revenue will be near the higher end of the projected range.

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Top 10 IoT Announcements at CES 2023

At the first full-fledged CES event after the pandemic, the excitement was palpable. The event did not disappoint in terms of the variety of announcements across the internet of things (IoT) spectrum. Our teams, both on-ground and online, tracked over 260 announcements made by over 240 companies covering a range of segments across consumer, enterprise and industrial.

Devices formed the most popular category, with three out of every five announcements relating to this segment. As expected, the consumer and smart home sectors took center stage, but it was intriguing to see new launches in industry segments such as agriculture. Additionally, smart home,  metaverse, augmented reality, healthcare and robotics were among the most talked about segments, attracting large crowds.

CES IoT Trend Counterpoint

Here are the top 10 IoT announcements from this year’s CES, according to Counterpoint analysts:

1. Wi-Fi: MediaTek launches Genio 700, Wi-Fi 7 products

MediaTek introduced the Genio 700 IoT chipset targeting industrial, smart home and smart retail applications. This chipset will be available by Q2 2023. MediaTek also showcased Wi-Fi 7-supported products like gateways, mesh routers, televisions, streaming devices, smartphones, tablets and laptops partnering with TP-Link, Lenovo, Hisense, ASUS, BUFFALO INC, Skyworks, AMD, Qorvo, LitePoint and MAC MLO among others.

MediaTek is slowly diversifying its offerings beyond smartphones. The availability of products with superior capabilities and increased partnerships will help MediaTek increase its footprint in the IoT market.

MediaTek launches Genio 700, Wi-Fi 7 products Counterpoint

2. Smart Home: TP-Link expands Tapo smart home products

TP-Link unveiled new products under its Tapo line of smart home devices. These new additions include cameras, a doorbell camera, a smart video door lock, robot vacuums and a smart hub home connection center. Besides, the company also launched its first Matter-certified smart plugs, smart switches, smart outlet extenders and smart bulbs. The launch of these products at CES 2023 highlights TP-Link’s focus on expanding and diversifying its offerings in the smart home market.

The company’s adoption of the Matter protocol for its Tapo and Kasa lines of smart home products shows its commitment to making smart home technology more accessible and user-friendly.

In addition to the smart home products, TP-Link also showcased Wi-Fi 7-supported router and gateway solutions for use in homes, enterprises and ISPs. The integration of Wi-Fi 7 will improve the gaming experience, as well as increase productivity in enterprise applications.

TP-Link expands Tapo smart home products Counterpoint

3. Asset Tracking: Pod introduces paper-thin tracker with SODAQ, Lufthansa

Pod Group, in partnership with SODAQ and Lufthansa Industry, has developed a paper-thin smart label tracking device that utilizes low-power cellular connectivity (LTE-M) for a battery life of up to six months. This sustainable, eco-friendly device uses alkaline batteries instead of lithium and has the potential to revolutionize the tracking and logistics industry by improving supply chain efficiency and reducing operational costs.

Similar efforts by SODAQ with Vodafone and Bayer utilizing NB-IoT technology have been observed, but the use of Low Power Wide Area Network (LPWAN) may be more beneficial as it targets a wider range of telecommunications operators.

Pod introduces paper-thin tracker with SODAQ, Lufthansa Counterpoint

4. Sensor: Bosch showcases sensor technology

Bosch Group subsidiary Bosch Sensortec presented a variety of new sensors at CES 2023. These offerings include an AI-enabled smart sensor system, magnetometer, barometric pressure sensor, and an air quality sensor. These sensors demonstrate advancements in power efficiency, accuracy and compact size, and aim to enhance the user experience by tracking personal health and fitness, providing accurate data and prolonging battery life.

Bosch has been a leading manufacturer of micro-electromechanical system (MEMS) sensors since 1995 and has produced over 18 billion units to date. It is also investing in quantum sensors, which can provide measurements that are significantly more precise than current MEMS sensors and enable more accurate diagnosis of neurological diseases. Additionally, the company is developing angular rate sensors that use the nuclear magnetic resonance of noble gas atoms and are optically pumped. These could prove to be highly precise and stable for navigation applications. Bosch believes that sensors will play a key role in IoT and continues to make investments in this area.

Bosch showcases sensor technology Counterpoint

5. Modules: Quectel enables satellite connectivity, strengthens automotive module portfolio

Quectel is partnering with Skylo to integrate satellite connectivity into its 5G-ready BG95x/BG77x series of LPWA modules. This hybrid connectivity solution improves network coverage and makes it ideal for a variety of applications, such as trackers, wearables, smart cities and smart meters. Low-earth orbit (LEO) satellites are going to be a key for the non-terrestrial networks (NTN) coming up in 3GPP Rel17/18 in addition to the high-altitude platform system (HAPS).

Quectel also launched the AG59X series of automotive-grade 5G modules based on Qualcomm’s SA525M platform to support autonomous driving. The company has strong partnerships with Chinese automakers such as Li Auto, Nio and BYD, and this module will further strengthen its efforts to increase share in the automotive connectivity market.

Quectel enables satellite connectivity, strengthens automotive module portfolio Counterpoint

6. AR/VR: Thundercomm unveils XR2 VR HMD, 5100 AR glasses and smart vending machine

Thundercomm, a joint venture between Thundersoft and Qualcomm, unveiled a VR HMD solution based on the Snapdragon XR2 platform and AR glasses based on the Snapdragon W5 platform. These products will not only provide flagship experience but also offer low power consumption, higher resolution and more wear comfort. The AR/VR space is heating up with the increased participation from leading technology and smartphone players such as Meta, Apple, HTC and Google. However, an early entry can be beneficial for Thundercomm.

The newly launched smart vending machine will help increase operational efficiencies for retailers. Moreover, this solution will improve the shopping experience and further extend retailers’ reach. Thundercomm is expanding its product lines to capture maximum value from both the consumer and enterprise IoT markets.

Thundercomm unveils XR2 VR HMD, 5100 AR glasses and smart vending machine Counterpoint

7. Robotics & Drones: Autel Robotics showcases EVO Max 4T drone

Autel Robotics has unveiled a new drone, the EVO Max 4T, which is capable of a variety of applications such as autonomous navigation, semi-autonomous flight missions, firefighting, and inspections. It is equipped with three high-quality cameras, capable of capturing footage from a distance of 1.2 km. Autel has also released the Dragonfish NEST infrastructure, which supports automated eVTOL systems, and the EVO NEST infrastructure, which can operate in all weather conditions.

Drones and eVTOLs will see higher adoption in the future with better efficiency in power consumption, security improvements and better regulatory compliances. These innovations will help Autel increase its presence in the enterprise market and remain competitive with companies like DJI.

Autel Robotics showcases EVO Max 4T drone Counterpoint

8. Industrial IoT: ZVISION partners NVIDIA to improve industrial sensing

ZVISION, a provider of solid-state MEMS LiDAR solutions, is working with NVIDIA to use its robotics simulation platform Isaac Sim to develop advanced robot sensing capabilities and provide high-performance LiDAR solutions.

In Industry 4.0, robotics and simulation will play a key role. Its partnership with NVIDIA will allow ZVISION to expand its applications beyond vehicles, while also reducing costs and speeding up time-to-market for companies undergoing digital transformation. ZVISION offers both short- and long-range LiDAR options that can be tailored to various applications.

ZVISION partners NVIDIA to improve industrial sensing Counterpoint

9. Platform: Tuya pushes PaaS 2.0, Cube for digital transformation

Tuya officially launched PaaS 2.0 to develop personalized solutions to fulfill global customers’ demands for “product differentiation and independent control”. For private cloud customers, it also unveiled Cube, an enterprise-level IoT platform deployment solution.

PaaS 2.0 is a unique innovation that can assist customers in reducing R&D costs and increasing product competitiveness. Tuya is focusing on public and enterprise cloud applications which are dominated by big cloud players like Alibaba cloud and Tencent cloud.

Tuya pushes PaaS 2.0, Cube for digital transformation Counterpoint

10. Healthcare: OMRON launches blood pressure monitor with ECG

OMRON introduced a new upper-arm blood pressure monitor with built-in ECG capabilities. This device aims to facilitate the early detection of heart disease by combining blood pressure monitoring and ECG technology. Utilizing home-monitored data, healthcare professionals will be able to provide early treatment and detect Atrial Fibrillation (AFib) at an early stage.

The company also announced the expansion of its digital healthcare apps with new features, such as the Personal Heart Health Coach and the Care Team within the OMRON Connect app. These new features will utilize AI technology to analyze vital data and provide patients with personalized guidance and exercise advice. OMRON’s innovative solution, leveraging technologies like AI, ML and IoT, will help healthcare professionals to better understand patient data through analysis.

OMRON launches blood pressure monitor with ECG Counterpoint


CES 2023 has provided ample food for thought for industry executives. Each of the announcements made at the event has significant implications for the direction of the industry. For example, the satellite-related announcements made by chipset and module players could help IoT companies focus on new use cases. Additionally, with Wi-Fi 7 becoming mainstream and Matter-certified home products being rolled out, we can expect to see a significant uptick in demand for smart home products. These developments and more continue to shape the future of IoT and solidify the role technology plays in our daily lives. With more innovation, the possibilities are endless and we are excited to see how the industry will continue to evolve.

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Post Event Coverage: Connected Vehicle 2020: Collaborating for an Autonomous and Connected Future

Post Event Coverage: Connected Vehicle 2020 | Bengaluru, India

Panel Discussion:  Software Driven Innovation for ADAS & Autonomous Future

Counterpoint Connected Vehicle 2020 Panel Discussion with Vinay PiparsaniaPanelists:

Summary of discussions amongst panelists:

ADAS technologies making self-driving possible

When can we expect rollout of autonomous cars, if at all?

A need for OEMS and suppliers to collaborate

Bureau of Indian Standards (BIS) formulating standards

  • In India, the subject of ADAS Standards are administered by the Intelligent Transport Systems Sectional Committee (TED 28) of the Bureau of Indian Standards (BIS). Scope of the TED 28 committee includes:
    • Standardization of information, communication and control systems in the field of urban and rural surface transportation, including autonomous, connected, intermodal and multimodal aspects thereof, traveler information, traffic management, public transport, commercial transport, emergency services, and commercial services in the intelligent transport systems, including associated security issues.
    • The committee has so far published 21 Standards and is working on at least another 10 subjects. The list of standards can be accessed from the BIS Website.
    • Currently, the committee has 13 active panels working towards standardization, some of which are Bus ITS, Traffic Management, Traveller Information Systems, RFID Application for School Buses, E-ticketing, Cyber Security and Functional safety of Road Vehicles, Tyre Pressure Monitoring System, etc. One of these is also Advance Driver Assistance Systems.
    • Any subject experts in the country wishing to come forward and contribute towards the formulation of standards are welcome to submit their proposals, the pro forma of which is available on the BIS Website under the Standardization Tab.


While AV technology is developing rapidly, the automotive industry is still a long way from manufacturing self-driving vehicles anytime soon with challenges remaining in consumer awareness, standardization, economics, regulations/compliances, privacy, safety, and security.

(For details on a quantitative outlook for Autonomous, Connected and Electric vehicles cars,  do enquire about Counterpoint Research Smart Automotive Tracker Services with press(at)

Tesla Q3 2019: Profits and Progress to Autonomy

Tesla beat Wall Street’s expectations in 3Q 2019, and by some margin. After losing over US$1 billion during 1H 2019, it registered a profit of US$143 million in the third quarter. And while it will still end up in the red for the full year, Tesla’s increasing volumes is good news for the still-developing ecosystem for future autonomous vehicles.

Tesla is getting close to its annual delivery target of 360,000-400,000 vehicles. In Q3, its deliveries stood at 97,000, a significant improvement over the 63,000 with which it began the year. To meet its target, it will have to sell 105,000 cars in 4Q 2019. Taking a long-term view, it is important for Tesla to keep increasing volumes. More vehicles on the road mean more data for it to fine-tune its development of autonomous vehicles. The Model Y, an electric SUV which Elon Musk believes will outsell all of its other models, will only add more Teslas on roads in 2020.

Tesla is confident that its cars will be capable of carrying out most driving tasks under supervision by the end of this year. Subject to regulatory approvals, the company is also confident of offering cars with Level 4 autonomy within 2020. While there is debate over whether the company is overpromising, Counterpoint believes that even if the launch is delayed by a couple of years, Tesla will remain ahead of big automakers in the development of autonomous vehicles.

Exhibit 1: Tesla Cars Production and Deliveries in 2019

The company’s acquisitions during 3Q 2019 will also improve its machine learning algorithms. One of the companies Tesla acquired during the quarter is DeepScale, a 12 employee, four-year-old startup. Its Carver21 is an AI software for autonomous vehicles using deep neural networks. Carver21 only works with front cameras rather than LiDAR. Tesla is not a believer in LiDAR, reckoning that cameras and radar are enough and also considerably cheaper than LiDAR. This makes DeepScale’s technology a good fit.

In 3Q 2019, Tesla also acquired Hibar Systems, a high-speed battery manufacturing company, which will aid Tesla to develop in-house battery technology and further ease delivery bottlenecks. Batteries remain the most important component of electric vehicles. Tesla’s efforts to gain expertise in battery technology and manufacturing is positive for the future when it will need a mix of in-house technologies and partners for battery supply.

Envisioning a future where the human is freed of driving tasks, Tesla continues to improve its in-vehicle experience. The latest software update, 10.0, adds Spotify Premium, Netflix, YouTube, and Hulu. There’s also ‘Caraoke’, a feature that lets drivers and passengers sing karaoke on a road trip.

To sum up, Counterpoint’s believes that the big positive for Tesla is its ever-increasing volumes. Its goal of creating fully autonomous vehicles will be made all the more possible if it has a large network of cars actively generating training data that will be used to train autonomous driving algorithms.

As it has already shown in 3Q 2019, Tesla can manage to improve operational efficiencies and trim costs when required. Greater volumes will also help bring down product development costs. With the head-start it has now, it is difficult to argue against Tesla leading the race in autonomous vehicle development.

How Far Away are Autonomous Vehicles?

Recent developments in autonomous vehicles (AVs) have been encouraging with numerous tests proving safety and reliability improvements. Tesla recently made bold claims – saying its cars would be capable of level 4/5 autonomy in 2020. How realistic is this and by when can we expect a significant rollout of autonomous cars?

Counterpoint Research predicts that, with the resolution of both the technological and regulatory issues, around 15% of new cars sold in 2030 will be fully autonomous (Level 4 to 5).

To make the vision of AVs a reality, OEMs, suppliers, and start-ups are applying cutting-edge technology to solve some of the biggest problems in computing, engineering, software development, and algorithm design today. However, it is regulatory and legal hurdles, rather than technological issues, that will prove to be the biggest barriers for self-driving technology.

Exhibit 1: ADAS Evolution in Automobile

ADAS Evolution in Automobile

Advanced Driving Assistance Systems (ADAS) are progressively demonstrating the reality of vehicles taking over control from drivers and playing the crucial role of preparing regulators, consumers, and corporations for the possibilities that lay ahead.

ADAS introduction has demonstrated that the challenges holding back adoption of AVs are consumer awareness, pricing, and most significantly, issues in privacy, safety, and security.

Safety remains the critical and overriding component of ADAS technology. ADAS uses both visual and aural warnings if they suspect an accident is imminent. Advanced versions can now actively steer the vehicle away or activate brakes if drivers ignore the warnings. Driver assistance technologies available today include adaptive cruise control, lane-departure warning systems, autonomous emergency braking systems, and parking-assistance systems. Some vehicles also offer the option of blind-spot monitoring and rear crossing traffic alert to supplement the other assistance systems.

ADAS enabled through radar scanners, sensors, and cameras, integrated into the vehicles central electronic control modules are fundamental blocks driving the progress towards fully autonomous vehicles. These ADAS systems enable the vehicle to perceive its surroundings, interpret obstacles and critical situations, and assist or alert the driver in performing maneuvers. The aim, ideally, is to completely prevent accidents or at least minimize the consequences for those involved.

As technology evolves and becomes more cost-effective, design engineers are constantly updating their autonomous systems to include new and different types of sensors. Further adding to the complexity is the role cloud computing will eventually play as 5G radio technology is rolled out and finally offers the bandwidth requirements needed for the massive data streams coming off sensor systems.

Exhibit 2: Increasing Focus on Autonomous Vehicles and Safety

Increasing Focus on Autonomous Vehicles and Safety

Clearly, automotive companies can no longer be experts in just mechanical and electrical engineering. They now need to be experts in radar, artificial intelligence, software development, motor controls, battery chemistries, big data analysis, machine learning, and the list goes on. The automotive industry, therefore, needs to collaborate across automotive suppliers, OEMs, integrators, technology developers, governments, and test vendors alike, to truly understand and propose solutions.

Regulatory hurdles holding back autonomous cars from becoming an everyday reality

However, the transition from human-driven to autonomous cars will not be seamless as it remains unclear how AVs fit into existing legal and regulatory frameworks around the world. Debates on how exactly the laws should, and will, handle the introduction of autonomous vehicles have differing and often contradictory conclusions. With existing legal frameworks proving to be inadequate, regulatory changes are urgently necessary to address a variety of barriers preventing the successful introduction of autonomous vehicles. As the reality of commercially available self-driving cars becomes more imminent, concerns about how the law—specifically tort law—will treat liability for autonomous vehicles has risen considerably.

Autonomous vehicles give rise to new liability and ethical issues

Assigning negligence forms the legal basis for liability in road accidents. Car owners, or the driver, are in the first instance liable for losses arising from accidents caused by their vehicles. Consequently, car owners are required to have, at a minimum, third-party liability insurance. Where an accident is a result of a fault or defect in the car, car owners/drivers will then look to the vehicle manufacturer or any of the component/service providers for recovery of any losses. States impose strict liability on producers of defective products for harm caused by those products. Inevitably, the introduction of autonomous vehicles adds another layer of complexity to attributing liability for car accidents. For example,  the fact that you are operating a self-driving car, and chose not to override it before an incident, does it amount to negligence on the drivers part, the AI/software developer, the manufacturer of the vehicle or the component supplier?

The problem with autonomy in cars is that drivers will tend to over-rely on them. Tesla’s Autopilot, for example, does not have Level 3 autonomy, but Level 2, at best. The self-drive capability difference between Level 3 – when the car can take full control under certain circumstances – and Level 2 is significant. Tesla’s do not have particularly sophisticated sensors, and fatal crashes have already demonstrated that fact. At Level 3 autonomy, the driver is required to remain ready to take over control at a moment’s notice.  Back in 2012, Google had tested Level 3 autonomy but found drivers were too trusting, and so decided not to take Level 3 to market at all, preferring instead to leapfrog towards developing full autonomous Level 5 vehicles, where no steering wheel or any other input is required.  There appears to be an emerging consensus that Level 3 autonomy is a bad idea altogether. This means OEMs need to advance from Level 2, something that most leading OEMs have achieved, to at least Level 4. The technological challenges involved in such a jump are akin to progressing directly from powered flight to landing a man on the Moon.

So what does ‘Auto’ stand for again?

Tesla is making bold claims about its autonomous vehicle plans. At an investor event last month, Elon Musk revealed technical details of a new chip and computer for full self-driving capabilities that are already being built into Tesla cars.  This is a key part of Tesla’s strategy to make autonomous cars mainstream. The company claims that the new chip will clear the way (subject to receiving regulatory approvals) to improve its software and neural networks to effectively operate its cars as fully autonomous vehicles.  In such vehicles, which would be out as early as 2020, drivers would not need to touch the wheel. While it has not always been clear what Musk means when he refers to full self-driving, it is apparent that Tesla does not apply the standard definition of  Level 4 or Level 5 autonomy.

Adding further to the debate is the first ever incident of a self-driving Uber car killing a pedestrian in Tempe, Arizona, in March 2018. The simple mundane everyday situation of a crosswalk, turn or intersection, is now presenting to be a much harder and broader ethical predicament, on how a car should decide between the lives of its passengers, and the lives of pedestrians.

 Uncertain timeline to having fully autonomous vehicles

AVs adoption rate largely depends on resolving regulatory issues, as well as changing consumer opinions and overcoming significant technological and economic barriers. It also depends on what we mean by ‘autonomous’ – are we referring to entirely autonomous systems or systems that demonstrate some level of autonomy along with some degree of human intervention?

The chief differentiator of driver assisted and fully autonomous systems is the ability to focus away from safety concerns and towards freeing up the driver’s attention and time.

Innovations in the autonomous systems’ capabilities will develop quickly. Autonomy, in limited, predictable environments, such as freeway driving, will likely be available widely within the next five years. TuSimple that provides trucks that self-drive long distance freeway routes are almost ready for commercial launch. A human is in the cab ready to take control though.

Dual control is emerging as the interim half-way mark between ADAS and full autonomy – cars that blend a degree of autonomous control with human driver control. It is this degree of autonomous control that will gradually shift. The notion of a fully autonomous car, where the driver is hands and attention free for the entire journey is, in our view, much further away though.

How far ahead are autonomous vehicles?

Human drivers demonstrate decision making that’s still a long way ahead of an AVs current ability. Human drivers process and react to varying information quickly, making rapid decisions based on experience, judgment, and ethics. Further, humans cautiously negotiate roads occupied by other similarly unpredictable human drivers and improvise when confronted with unique situations. Current AVs may perform some of these tasks possibly faster and more consistently, but none can yet compare with a human across all situations.

In early 2018, GM introduced the Cruise AV – an autonomous hatchback, based on the Chevrolet Bolt EV, drawing significant attention with the absence of a steering wheel and pedals. While GM has not revealed any plans for a production run, it has been petitioning the American government for permission to test the model on public roads in 2019. Validating the significant role such autonomous cars can play in a Mobility as a Service (MaaS) automotive market in the future, Japan’s SoftBank Vision Fund, a leading global large tech investor, invested US$2.2 billion in May 2018 for a 19.6% stake in GM’s autonomous driving business.

Exhibit 3: Key Firms With Permits to Test Self Driving Cars in California

Key Firms with Permits to Test Self Driving Cars in California

The other key technology enabler to full autonomy will be the development of comprehensive data networks, comprising edge-based and cloud-based infrastructure. This will require the automotive industry working closely with other sectors, such as IT and telecoms industries, as well as public and industry policymakers, reaching agreements on a range of important issues, such as data center design and locations, enabling vehicles to communicate reliably and securely with their local environment.

On the face of it, while the future of AVs looks bright, the automotive industry is still a long way from manufacturing vehicles that can self-drive anywhere and everywhere under all conditions.

(Read more in the recent research article Definitive Trends Reshaping the Global Automotive Industry,  where we look at major technological disruptions and evolving consumer requirements metamorphosing the automotive landscape

For further details on the quantitative outlook for Autonomous, Connected and Electric vehicles cars, please do enquire about our Smart Automotive Tracker Services with


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