Tesla’s Self-Driving Cars Get Smarter, 2 Major Problems Get in the Way of Business

Tesla's Autopilot Gets Smarter, 2 Major Problems Get in the Way of Business

The core part of Tesla’s mission is to develop and refine the technologies to enable self-driving capability. Last October 14, autopilot has been introduced for Model S sedans manufactured after September 2014 and Model X SUVs.

The new autopilot feature is teaching itself to drive better. Two weeks from its release and the Model S autopilot is already improving its self-driving experience. One owner posted on Tesla Motors Club forum describing the Model S “diving” for an exit ramp the first day but improving days later. The owner noted, “Each day the system seems to have less tendency to follow the exit ramps as I pass. The last two days it only gave a momentary wiggle and moved over maybe six inches towards the exit ramp then it recovered and moved on down the road.I did not have to correct it at all. I find it remarkable that it is improving this rapidly.” A couple of weeks ago when autopilot was released, drivers had to keep their hands on the wheels and intervene when the car was veering off course. Now, Model S drivers have observed that the car seems to have lesser need for human control.

Tesla Motors make great cars. In lieu with the success brought about by the introduction of autopilot system, it’s still struggling on its stock shares. Last year, Tesla Motors’ share price plummeted by 14.4% while its percent of float short has increased by 22.56%. Business Insider pointed out two major problems which have nothing to do with Tesla Motors’ cars.

First problem is its Superchargers. The cost of building and maintaining its network of charging stations are no easy matter. Currently, there are nearly 3,000 individual Superchargers worldwide and over 500 Supercharger stations.  Tesla cars function optimally with Supercharger. High-speed charging is a must hence building networks of Supercharger stations. The cost of operating a Supercharger is not costly, building one is. If Tesla is aiming to produce 500,000 vehicles annually by 2020, they need to invest a huge chunk of money to build more Supercharger stations.

Second problem, Tesla wants to shoo away the traditional car dealership system. They want to sell their cars directly to consumers. Tesla wants to build network of stores. This will tie up a staggering amount of capital as car dealership needs a big building therefore a big lot, service bays, superchargers and trained competent sales staff.

These problems haven’t caught up with Tesla, yet. However, they will need to address these two opportunities for its business to thrive.

 

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