Tesla's Model 3 is critical to its future as an autopilot leader (TSLA)

pulse

May 24, 2017 7:30 PM

In order to collect the necessary amount of data needed to improve its driver assistance systems, Tesla will need cars on the road.

Tesla's Model 3

And to collect the necessary amount of data needed to improve its driver assistance systems, Tesla will need cars on the road.

A successful rollout of its Model 3 will be critical to maintaining Tesla's position as a leader in the autonomous driving world, according to a note from analysts at Oppenheimer.

"We believe that, as far data collection is concerned, Tesla has a material advantage to date," write Oppenheimer analysts. "Should the Model 3 ramp on schedule, or even late as most investors expect, we believe the cost effectiveness and time to learning are critical advantages for TSLA."

Essentially, maintaining its advantage in miles driven with a successful Model 3 rollout would put Tesla in prime position to develop the best AI systems.

Miles driven is a crucial metric for autonomous driving systems developers because in order to prove that any AI system is superior to a human driver, data needs to be collected from a massive amount of miles driven.

According to a RAND Corporation study, 11 billion miles would be needed in order to prove an AI's superiority to a human driver with 95% certainty. Tesla CEO Elon Musk himself has theorized that 6 billion miles would be needed for worldwide regulatory approval.

Tesla will be in a race to collect those miles with competitors such as Mobileye, which was recently acquired by Intel for $15.3 billion. But Oppenheimer analysts believe this race is just getting started.

"Although autonomous driving has gained increasing interest from investors and potential corporate partners, we believe we are still in very early stages of the development of technologies to support fully driverless vehicles. "

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