Bloomberg News

Tesla CEO Talking With Google About ‘Autopilot’ Systems

May 07, 2013

Tesla CEO Talking With Google About ‘Autopilot’ Systems for Cars

Elon Musk, chief executive officer of Tesla Motors Inc., in Palo Alto, California. Photographer: David Paul Morris/Bloomberg

Elon Musk, the California billionaire who leads Tesla Motors Inc. (TSLA), said the electric-car maker is considering adding driverless technology to its vehicles and discussing the prospects for such systems with Google Inc. (GOOG)

Musk, 41, said technologies that can take over for drivers are a logical step in the evolution of cars. He has talked with Google about the self-driving technology it’s been developing, though he prefers to think of applications that are more like an airplane’s autopilot system.

“I like the word autopilot more than I like the word self-driving,” Musk said in an interview. “Self-driving sounds like it’s going to do something you don’t want it to do. Autopilot is a good thing to have in planes, and we should have it in cars.”

Tesla, based in Palo Alto, California, is considering such technology as regulators and long-established automakers grapple with when and how it can be used to increase safety and driver convenience. Global automakers such as Nissan Motor Co. and government officials say fully autonomous vehicles may not reach dealer showrooms for a decade, twice as long as Google expects.

Google founders Larry Page and Sergey Brin, both investors in Tesla before its 2010 initial public offering, have been proponents, with their Mountain View, California-based company demonstrating a driverless fleet of Toyota Prius hybrids equipped with laser-radar devices mounted on the roofs.

‘Too Expensive’

Google’s approach builds on a push for the driverless-car technology long pursued by the U.S. military’s Defense Advanced Research Projects Agency, which held vehicle competitions for carmakers and research labs. Anthony Levandowski, product manager for Google’s self-driving car project, has said the company expects to release the technology within five years.

“The problem with Google’s current approach is that the sensor system is too expensive,” Musk said. “It’s better to have an optical system, basically cameras with software that is able to figure out what’s going on just by looking at things.”

Musk is determined to bring the cost of Tesla’s cars down so that the company can sell to mainstream consumers. Tesla’s Model S sedan has a $69,900 base price, and Musk says the company still intends to squeeze expenses to offer a model for about $30,000 within a few years. The Roadster, the company’s first offering, started at $109,000.

Tesla slid 6.7 percent to $55.51 at the close in New York, the biggest one-day decline since April 3. The shares have soared 64 percent this year, outpacing the 14 percent rise in the Russell 1000 Index. Tesla has said it will report its first profit from sales of all-electric Model S sedans when the company releases first-quarter results tomorrow.

Google’s Technology

Google, in an e-mailed statement, declined to comment on Musk’s comments.

Google’s driverless technology is guided by Sebastian Thrun, former head of Stanford University’s Artificial Intelligence Laboratory. Thrun led the Stanford team that won a $2 million prize in the 2005 DARPA Grand Challenge of autonomous vehicles, finishing with the best time on a rugged 132-mile (212 kilometer) course in the Mojave Desert.

“We’ve had some technical discussions with Google” about its Light Detection and Ranging, or Lidar, laser tracking system, Musk said last week, noting that it’s an expensive approach that may not prove feasible, Musk said.

Google ‘Fan’

“I think Tesla will most likely develop its own autopilot system for the car, as I think it should be camera-based, not Lidar-based,” Musk said yesterday in an e-mail. “However, it is also possible that we do something jointly with Google.”

Musk wrote a follow-up post on Twitter about Google.

“Am a fan of Larry, Sergey & Google in general, but self-driving cars comments to Bloomberg were just off-the-cuff,” Musk wrote. “No big announcement here.”

Musk, who has developed a reputation for speaking freely through Twitter and in interviews, said it’s possible Tesla could be acquired at some point in the future.

“That’s one of the possible outcomes, I suppose,” he said, adding such a development isn’t likely soon.

“I’d guess it would come from outside the auto industry,” Musk said. “It would be a buyer with a very large cash position,” he said, without elaborating.

Musk said in the same interview that the company’s volatile share price results from “a very polarized opinion about Tesla. We’ve got a huge short position against Tesla. I mean it’s truly enormous. We’re typically within the top five most shorted stocks on the market.”

Short Interest

Currently, investors have a short interest in 46 percent of Tesla’s floating shares, the fifth-highest short interest as a percentage of float in the Nasdaq, according to data compiled by Bloomberg.

While crash-avoidance systems that can alert a driver or apply brakes in advance of a wreck are coming to cars now, David Strickland, head of the U.S. National Highway Traffic Safety Administration, has said autonomous vehicles “are a long way off.”

“Self-driving cars are the natural extension of active safety and obviously something we should do,” Musk said.

Google’s self-driving cars are currently allowed on public roads for testing purposes in Nevada, California and Florida.

Toyota Motor Corp (7203)., also a Tesla investor, in January showed a driverless test vehicle in Las Vegas equipped with a Lidar device, radar and cameras and sensors -- something more like the approach that Musk suggests.

Virtual ‘Co-Pilot’

Likewise, Toyota, the world’s largest automaker, wants to create a virtual “co-pilot” that helps drivers avoid accidents, rather than self-driving cars and trucks. Tesla isn’t discussing driverless-car technology with either Toyota or Daimler AG, which is also a shareholder, Musk said. Self-driving vehicles aren’t a top priority at the moment.

“We’re not focused on autopilot right now; we will be in the future,” Musk said. “Autopilot is not as important as accelerating the transition to electric cars, or to sustainable transport.”

Musk made a similar comment on Twitter.

“Creating an autopilot for cars at Tesla is an important, but not yet top priority,” Musk wrote. “Still a few years from production.”

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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