Tesla Provides Update on 'Model 2', Its $25k Car, During Earnings Call

Tesla's gives an update on its upcoming more affordable vehicle

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The third-quarter earnings call for Tesla offered intriguing insights into the direction and focus of the company's upcoming next-gen vehicle, dubbed the Model 2 or the $25,000 car.

While drawing on a comparison to Cybertruck's production challenges, Elon Musk declared this vehicle will be more conventional for production with the overarching goal of achieving an unmatched level of manufacturing efficiency.

Functional Beauty: The Aesthetic Vision

The next-gen car is predicted to be the most produced car in Tesla's lineup, with the potential scale and reach of the Model 2, with implications suggesting it could match the combined volume of other Tesla models. The "high-volume, low-cost" will be simpler in design and technological features to achieve a production speed unprecedented in the auto industry. The mention of achieving "units per minute level that is unheard of" paints a picture of Tesla's commitment to scale and affordability.

Breaking away from the enchantment often associated with Tesla vehicles, Musk set the stage for a different kind of vehicle in the Model 2. Described as "utilitarian," this new vehicle won't be about enchanting consumers but serving a functional purpose. Despite this, Musk reassured that the car will still bear Tesla's signature beauty.

The Quest for Affordability

A dominant theme throughout the call was the relentless push towards reducing costs and improving operational efficiencies. Vaibhav Taneja, Tesla's Chief Accounting Officer, pointed out the myriad challenges and variables in managing product margins, especially given the ongoing factory upgrades.

Nevertheless, company representatives remain unwavering in their dedication to cost reductions for 2024, showcasing Tesla's commitment to affordability. As Taneja describes, this "cost attack" strategy involves meticulous examination and improvement of every line item, highlighting Tesla's dedication to affordability at every turn.

Musk equated their cost-reduction strategy to a "Game of Thrones" where even saving pennies mattered. Musk highlighted the importance of such savings, highlighting how even small elements, like unnecessary internal stickers or QR codes, are being scrutinized for their contribution to the vehicle's cost.

Driving down the costs for the Model 2 isn't just about large-scale production adjustments; it's about scrutinizing every tiny detail. Musk illustrated the cost anatomy of a vehicle, emphasizing the challenge of saving even $0.40 on each of the approximately 10,000 parts in a car.

What This Means for Model 2

All these cost-saving strategies are directly tied to Tesla's aspiration to introduce the Model 2 at an unprecedented price point. By focusing on "pennies" and being "ruthless" in their cost-cutting measures, Tesla is gearing up to deliver a vehicle that doesn't just promise efficiency and sustainability but also unparalleled affordability.

The road to the Model 2 is evidently layered with challenges. Still, if there's one takeaway from the earnings call, it's that Tesla is more committed than ever to making the dream of an affordable electric vehicle a reality for the masses.

Tesla to Eliminate the Steering Wheel Nag in FSD v12.4; Vehicles Supported and Release Date

In a recent interaction on X, Elon Musk confirmed that the long-standing steering wheel nag, designed to ensure driver attentiveness, would be removed in FSD v12.4.

Musk initially replied to a user on X claiming that FSD v12.4 would fix the steering wheel nag. However, it wasn't clear what Musk meant by fixed until user, Farzard, created another post stating that Musk insinuated that the nag would be removed in FSD v12.4, to which Musk replied with “Yes.”

Tesla's removal of the steering wheel nag isn't surprising, as Tesla's camera-based driver monitoring system in the vehicle can in theory do a much better job monitoring the driver's attentiveness. So before NHTSA has a heart attack with Musk's comment, it's important to understand that Tesla is likely improving cabin camera monitoring in this same update to the point that the steering wheel nag becomes redundant.

How Tesla Uses the Cabin Camera

Tesla uses the cabin camera to detect whether a driver is paying attention to the road by detecting whether their eyes are open, which way their head is facing, and even whether the driver is using their phone.

Thanks to Tesla hacker Greentheonly, we know Tesla uses the vehicle’s interior camera output and AI to determine the likelihood of each scenario they're looking for. For example, Tesla runs neural networks that look at the video feed of the cabin camera and determine whether the driver is looking up at the road, looking off to the side, or looking down.

This Won't be the End of the Steering Wheel Nag

While Musk's statement implies the removal of the steering wheel nag, Tesla will probably retain it as a fallback measure, at least in early iterations of the suspected improved camera-based monitoring system.

The steering wheel nag may still be used when the cabin camera can't confidently determine whether the driver is paying attention. This could be caused by sunglasses, hats, glare, or even driving at night. Newer Teslas include interior infrared lights that help the camera see in the dark, although not all Teslas on the road include infrared lights.

Will It Also Remove It For Basic Autopilot?

While Musk says Tesla will remove the steering wheel nag in FSD v12.4, the need to detect driver attentiveness isn’t unique to FSD. Tesla detects for driver attentiveness in all their Autopilot packages, including Basic Autopilot, Enhanced Autopilot, and FSD. It’s not clear whether Tesla plans to only remove the nag in FSD, but it looks like Tesla will at least start there and the feature will likely work its way down to Enhance Autopilot and Basic Autopilot as well.

Vehicles Supported

The only Teslas expected to take advantage of the “nag-less” improvements in FSD v12.4 are those with cabin cameras, which include the Model 3, Model Y, Cybertruck, and the redesigned Model S and Model X. However, the newest vehicles with infrared lights near the cabin camera will likely benefit the most.

FSD v12.4 Release Date and Features

Elon Musk indicated that FSD v12.4 could start rolling out as early as next week. Musk doesn't usually reveal what's in each FSD update, but he did talk about what we should expect in FSD v12.4, disclosing that the update will largely focus on refining passenger comfort by addressing concerns such as abrupt acceleration and braking.

Musk went on to tease some of the improvements to expect in subsequent versions like v12.5 and v12.6, but the primary focus of v12.4 seems to be delivering a smoother and better driving experience.

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Musk Shares What to Expect in FSD v12.4 Next Week; Talks About Abilities of FSD v12.5 and v12.6

Less than two weeks since its last FSD update, Tesla is getting ready to release FSD v12.4, with CEO Elon Musk hinting at significant improvements. The current version, 12.3.6, introduced Autopark and High Fidelity Park Assist for vehicles equipped with ultrasonic sensors in the U.S. and Canada, along with minor fixes for FSD.

Just an hour ago, Musk shed some light on Tesla's next FSD update. Through his X account, Musk teased the imminent release of v12.4, stating, "Probably start rolling out 12.4 next week." Moreover, he provided insights into the development process and the features users can expect in the upcoming 12.4 version, as well as v12.5 and v12.6.

What to Expect in FSD v12.4

Musk says that FSD 12.4 has extensive retraining of AI models that particularly focuses on refining the comfort of passengers by addressing concerns around abrupt acceleration or braking. Musk previously commented on the next versions of FSD saying that FSD v12.4 and 12.5 would be major improvements, and while v12.4 may be a major step forward, it looks like its main focus will be on being more natural and smoother.

"Probably start rolling out 12.4 next week."

FSD v12.5 and v12.6 to Handle More Complex Scenarios

Looking ahead, Tesla is already laying the groundwork for future updates according to Musk. The CEO previously stated that Tesla is constantly working on FSD updates that are three to six months ahead of what’s in production, so they have a good idea of what the software will be able to handle in the future.

Today on X, Musk said that there's ongoing testing for FSD versions 12.5 and 12.6, which involves tackling complex scenarios. Musk says this includes navigating narrow, one-way roads and handling unexpected road closures, requiring the vehicle to reverse and find alternate routes. 

Actually Smart Summon in v12.5?

Tesla’s Autopilot lead, Ashok Elluswamy, previously talked about how FSD would gain the ability to go in reverse when Tesla is ready to release Actually Smart Summon. If the ability to reverse is still tied to some of the abilities of Actually Smart Summon, then, it’s possible we may see Tesla’s better summon implementation in version 12.5 or 12.6.

Vehicles to be Able to Communicate with Fleet

Musk also gives us some insight into vehicle communication, saying vehicles will need to be able to communicate with the fleet so that you "don't get a whole bunch of Teslas stuck down a road."

Instead of vehicle-to-vehicle communication, Tesla will likely have vehicles report back to the "mothership," where Tesla can aggregate data and report it to nearby vehicles. This is similar to how vehicles report traffic today, instead of talking directly to each other.

Spending on AI

Tesla's commitment to advancing its AI capabilities is evident through its substantial investments. Musk recently emphasized the company's dedication to spending around $10 billion throughout 2024 on training and inference AI. Musk said that any company that isn’t spending billions on AI this year just won’t be able to compete.

Expansion of FSD 

Tesla appears ready to start the expansion of FSD, and it looks like China may be up first. Musk's recent visit to Beijing to discuss a potential FSD rollout and data sharing shows that Tesla is ready and serious about FSD's expansion.

While FSD's rollout in China appears promising, Musk remains cautiously optimistic about expanding into other markets. He believes that FSD v12 is ready for supervised FSD in left-hand drive (LHD) countries, while right-hand drive (RHD) markets like the UK and Australia may require additional time.

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