Tesla registered a new high resolution radar unit with the U.S. Federal Communications Commission (FCC). Tesla's intended use for these radar units is unknown, but it appears they are intended for imaging, similar to how LiDAR uses lasers to map surroundings.
While Tesla's FSD software has used radar in the past, Elon Musk has a rather unfavorable stance on LiDAR. For the purposes of autonomous driving, Musk sees LiDARs as a "fool's errand." Yet, people have been spotting Tesla prototypes with LiDAR sensors since last year.
Tesla files a patent for a high-res radar sensor
The latest instance of Tesla using LiDAR comes from Twitter user @ManuelRToronto who spotted a LiDAR-mounted Tesla in downtown Toronto, only a few weeks after the release of FSD Beta in Canada.
He took a video of the LiDAR-mounted Model Y with manufacturer license plates from California.
There has been no official announcement from Tesla about these LiDAR-mounted vehicles, but it is safe to assume that Tesla will not use LiDAR on any production vehicles.
Tesla is likely using LiDAR to help train their machine learning algorithms, using it as the ground truth when checking for accuracy. Unlike cameras, LiDAR captures extremely accurate 3D depth measurements.
LiDAR could be used to train these algorithms to accurately interpret depth by relying on precise, non-interpretive LiDAR sensors.
Cameras are limited to 2D data combined with computer vision algorithms to interpret 3D depth. The downside to this approach is that it requires a computational process versus having precise 3D depth measurement from a LiDAR sensor.
However, LiDAR sensors are expensive; the benefit of relying solely on cameras is that it makes Teslas much more affordable.
LiDAR can't be the only sensor used in a vehicle since it can only build a wireframe 3D environment. Without cameras it wouldn't be able to read traffic signs, traffic lights or anything that doesn't have depth.
Vehicles with LiDAR also rely on camera data and fuse the two outputs of the two sensors together to build a virtual representation of the real world.
Musk believes that self-driving cars should navigate the world in the same manner as human drivers. Since humans use their eyes and brain to navigate three-dimensional space, cars with cameras and enough computational power should be able to achieve the same thing.
"Humans drive with eyes and biological neural nets, so it makes sense that cameras and silicon neural nets are the only way to achieve a generalized solution to self-driving, " says Elon Musk.
While other self-driving initiatives like Google's Waymo have taken a LiDAR approach, Tesla is outpacing the competition using vision-only, machine learning and the network effect of over 100,000 vehicles in the FSD Beta program.
Tesla's vision-only approach has become smart enough that adding radar data gives the system more information than it needs and disorients the FSD software.
LiDAR and radar may be helpful in training the FSD software, but Tesla wants to avoid using multiple sensors with potentially conflicting perceptions that would overwhelm the system.
With Tesla's recent patent of a high resolution radar, and the recent reported use of LiDAR, it is possible that Tesla's Robotaxi will employ radar and/or LiDAR in order to reach full automation.
Levels of driving automation
Synopsys
Tesla's FSD software could eventually be segmented into consumer and commercial self-driving vehicles with consumer vehicles reaching conditional autonomy (L2/L3) using vision-only and commercial vehicles reaching full autonomy (L4/L5) with the help of radar or potentially even LiDAR sensors.
Commercial robotaxis could even be multi-sensor (cameras, radar, LiDAR), costing much more, while consumer self-driving vehicles would be vision only and more affordable.
In this article, we’ll cover Tesla’s updates on Optimus, batteries, and Tesla Energy.
Optimus
Tesla has been working away on their humanoid robot and continues to make progress in software and hardware.
First, Tesla is preparing the Fremont factory for the Optimus pilot production line, which is scheduled for completion later this year. Once it is, wider deployments of Optimus for internal use within Tesla’s facilities are expected as well. Tesla aims to have several thousand Optimus units working in its North American factories by the end of the year once the pilot production line is operational.
Tesla’s goals for production remain extremely lofty - 1 million units per year by 2030. However, they could face some challenges when ramping production.
Key components like the shoulder actuators use specialized permanent and rare-earth magnets, which are currently sourced from China. Due to recent Chinese restrictions on the overseas sale of these magnets, Tesla is seeking an exemption or alternative suppliers. They have not yet looked into modifying the shoulder actuator but will likely do so if they cannot obtain the necessary materials.
Batteries
Batteries are another item that Tesla’s teams have been working on behind the scenes for years now. The second generation of the 4680 - the Cybercell - has been IRA-compliant for some time now. This means that the Cybertruck is eligible for the US Federal EV rebate.
Tesla also achieved the lowest cost-per-kWh of any of its cells with the 4680 battery - and it is potentially one of the cheapest cells being manufactured by any vehicle battery manufacturer at this point. With dry-cathode still being worked on, Tesla may be able to squeeze more optimizations and cost efficiencies from the 4680 cells.
Additionally, Tesla is progressing with its plans for lithium refining and cathode production in the US, both of which are scheduled to commence in 2025. While the company says they’re no longer supply-constrained for non-LFP vehicle batteries, on-shoring production and sourcing critical minerals from nations outside of China will be key.
LFP batteries continue to be supply-constrained, namely for the Tesla Energy division. LFP batteries and their materials are sourced from China. Due to tariffs and limited exports, Tesla can’t obtain enough and is considering potentially building an LFP production facility in North America.
Energy
Tesla’s energy division is still experiencing some of the highest growth of any of its divisions. Year over year, Tesla saw a 154% increase in energy storage deployments, including both Megapack and Powerwall - for a total of 10.4 GWh deployed in just Q1 2025. While deliveries in energy storage remain volatile due to the nature of Megapack installations, Tesla expects growth to continue rapidly in this segment.
Tesla also deployed 1GWh of Powerwall 3 residential storage this quarter, marking its strongest quarter. Powerwall 3 has received positive feedback from customers, many of whom appreciate its new capabilities with its built-in inverter for solar.
Megapack is continuing to see demand increases, currently highlighted by utility-scale Megapack systems, as well as data centers requiring stable power delivery. Megafactory Shanghai is also online now and producing Megapacks - with an annual production capacity of 20GWh today and up to 40GWh in the future. The site has also produced over 100 Megapacks this quarter, which are all awaiting delivery.
There was a lot of interesting news from Tesla’s Q1 2025 Earnings Call, covering everything from FSD and Robotaxi - to the less glamorous but equally important Megapack and Powerwall.
Tesla is heavily leaning into artificial intelligence, and its insurance offering is just another example of how it’s improving its product or lowering costs by leveraging AI.
Tesla recently started offering an insurance discount in select states when drivers use FSD for at least 50% of their drives and now it’s introducing an AI to help handle customer claims.
Tesla has developed an in-house voiced AI agent that can assist customers in handling simple support requests for Tesla Insurance.
For customers calling in from those states, the new AI agent provides a unique way to address the most common support calls. And it’s not just answering common questions but actually making requested changes to the owner’s account.
Policy Changes
The first key item is that it automates policy changes. Simple policy updates, including adjusting your deductible or coverage limits, are now done via AI. For policyholders who are simply looking to make quick changes and don’t have any questions, this makes the process a lot quicker by not having to wait for a representative. Tesla isn’t eliminating representatives, but this could reduce the number of representatives required or reduce wait times.
Continue Where You Left Off
The second item here, highlighted by Raj Jegannathan from Tesla’s internal IT team, is that Tesla’s AI agent is able to offer summaries of the user’s last interaction with Tesla Insurance. It will summarize your last interaction and provide assistance on that particular topic if you need to continue it. That means that you don’t have to wait for a human to review your file - the AI will kick off right where you left off.
Tesla appears to be focused on improving efficiency and making support more accessible. While actual items like claims are left up to humans due to their inherently complex nature, this helps free up employees to handle more complex items. While there’s no doubt Tesla will continue to develop this AI like they do everything else, we may soon see it take on even more tasks.
More AI
This isn’t the first AI agent that Tesla has demoed - there is now a chat-based AI sales agent available on the front page of Tesla’s website, which is able to answer common questions on Tesla vehicles.
Tesla has also been improving their AI support tool available in the Tesla App is able to provide feedback on common issues and also guide users towards either solving the problem or placing a support request.
Tesla’s strategy here is to influence the cost-heavy areas associated with having humans address simple requests and instead leverage AI, which can offer instant answers and reduce support costs.
Roll Out to More States
While this new AI is currently limited to just 12 states, it is likely to follow Tesla Insurance’s expansion. Insurance seems to have been at a bit of a standstill lately. Tesla continues to improve features such as the improvements to Safety Score V2.2, but we haven’t seen Tesla roll out support to new states since it added Minnesota in November of 2022.
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