LNG: TESLARATI

Recent videos captured from Tesla’s Gigafactory 3 site has revealed more of the amazing progress in the construction of the upcoming electric car factory.

While there are projects ongoing on other areas of Tesla’s 864,885-square meter lot, most of the work currently being done is on Phase 1, which is expected to include the buildout of the site’s general assembly building. So far, over 100 pillars appear to have been built, and several metal roof trusses are being constructed. There are also over two dozen heavy machinery deployed on the site.

China is known for its quick buildouts, but seeing a large-scale project such as Gigafactory 3 come to form is still quite surreal. It should be noted that in the middle of March, Tesla and its construction partner inaugurated the first steel pillar in the entire site. The pillar, which is reportedly an 11.5-meter, 10.8-ton column, has since been joined by over 100 others since. All of this happened in the span of just three weeks.

At the pace that it’s going, it will not be too surprising if Gigafactory 3’s first phase ends up being complete by May. This is a timeline that was not set by Elon Musk or Tesla. Instead, it was a target that was personally announced by Shanghai official Chen Mingbo. This timeframe was reiterated last week too, when Tesla Automotive President Jerome Guillen visited China and met with Shanghai Deputy Mayor Wu Qing.

According to local news agencies that covered the meeting, the Chinese government official and Tesla executive discussed the progress of Gigafactory 3, as well as a goal of starting the installation of vehicle production equipment as early as May. If successful, Tesla can start working on Gigafactory 3’s Model 3 production lines by the end of Q2, allowing the company to iron out any issues before starting the manufacturing of the vehicle by the end of the year. Such a strategy will allow Tesla to ramp its Model 3 production in China in a way that is far less painful than the vehicle’s ramp in the United States.

Gigafactory 3 is a key component for Tesla’s business in China, which is regarded as the largest electric car market in the world. So far, Tesla’s vehicles are met by steep tariffs when they enter the country, thanks to the ongoing trade conflicts between the United States and China. By producing low-cost versions of the Model 3 being built in the facility, it will only be a matter of time before Tesla starts competing head-to-head against the country’s largest and most competitive electric car makers.

Watch the latest flyby of Gigafactory 3 in the video below.

Tesla CEO Elon Musk has confirmed that the installation of the company’s custom Full Self-Driving Hardware 3 computer could be accomplished through its ever-expanding network of mobile service units. With this system, Tesla owners who purchased Full Self-Driving will have their vehicles upgraded in a completely effortless and convenient manner.

Elon Musk previously emphasized that HW3 is built with the same physical footprint as its predecessor, allowing for a quick and easy retrofit for vehicles that will require an upgrade. Previously, the Tesla CEO noted that the Hardware 3 installation will involve a quick trip to a service center. Musk has revised his statement in a recent tweet, stating that the company’s mobile service team should be able to handle the task without any issues.

The utilization of Tesla’s mobile service team for the upcoming Hardware 3 retrofit is a strategic move for the electric car maker. With thousands of vehicles to retrofit, conducting the upgrade in a service center will likely result in bottlenecks due to the number of vehicles that need to be upgraded. By literally sending the HW3 to owners’ homes, Tesla’s service centers can focus on tasks that are more urgent, such as vehicle repairs. This strategy also plays into the strength of Tesla’s mobile service network, as the unit continues to grow significantly by the quarter.

Musk also dropped a couple of tidbits about the company’s custom Self-Driving computer, which is already in production. According to Musk, HW3 is “at about 5% compute load or 10% with full fail-over redundancy” when handling tasks like Navigate on Autopilot with automatic lane changes. In comparison, Musk noted that HW2.5 is at about ~80% compute load when processing similar tasks.

Tesla’s Hardware 3 is specifically built to attain autonomous driving. Discussing the capability of the custom hardware in the Q3 2018 earnings call, Musk estimated that the custom computer should be able to provide the company’s electric cars with a 1,000% improvement in processing capability compared to existing NVIDIA components. Musk explained this point in his appearance at ARK Invest’s For Your Innovation podcast earlier this year.

“So right now, we can process on the order of 100 frames a second and we really need to do a lot of work in terms of cropping the frames, and sort of bending the pixels, and not going to full resolution on all cameras, that kind of thing with the current hardware. We’re at full frames, full resolution with the Tesla hardware. All cameras, at full resolution, full frames, and it still hasn’t tapped out,” Musk said.

Some of the capabilities of Hardware 3 will likely be showcased this April 22, when Tesla holds its Autonomy Investor Day. The event, which will be livestreamed, will include talks from key executives who were involved in the development of the company’s autonomous software and hardware, including CEO Elon Musk, VP of Engineering Stuart Bowers, VP of Hardware Engineering Pete Bannon, and Sr. Director of AI Andrej Karpathy. Test drives in vehicles equipped with yet-to-be-released Autopilot and Full Self-Driving features will also be offered for the event’s attendees.

Tesla and Fiat Chrysler have entered into a deal to help the legacy automaker weather strict European Union emissions regulations that are set to take effect next year, according to a report published by Financial Times. This arrangement is the first of its kind and is estimated by one Wall Street firm to equate to $500+ million dollars worth of credits to Tesla from Fiat Chrysler over the next 2-3 years.

Jefferies on the @Tesla @fiat open pooling arrangement:

«We assume that compensation to Tesla could be in excess of $500m relating to 2020 and 2021 each with payments possibly starting earlier (2019) to spread costs».

— Patrick McGee (@PatrickMcGee_) April 8, 2019

Beginning in 2020, 95% of automotive fleet-wide emissions in the EU must average under 95g of CO2 per kilometer, i.e., have a fuel efficiency of about 57 mpg for internal combustion vehicles. In 2021, full fleets must be compliant, and the penalties could add up to financial ruin for companies unable to meet the strict standards.

The EU rules further allow different auto companies and divisions to pool together to form an expanded fleet, thus averaging out emissions across larger numbers of vehicles. Companies with existing low or zero emissions divisions can combine with their higher emissions divisions to meet the standards, or if the benefit outweighs the awkward arrangement, they can combine with companies like Tesla whose all-electric, zero emissions fleets would provide significant average emissions reductions.

Tesla offered its “open pool” deal to other auto manufacturers, but the Italian-American car maker was the only one with an arrangement by Tesla’s March 25th deadline. Fiat Chrysler has been slower than its industry peers to adopt an electrification plan for its vehicles sold in the region and needed to buy more time until a strategy could be worked out. The company has announced a $10.5 billion dollar plan to bring alternative power to its vehicle lineup, but any efforts in that direction will not manifest into enough production vehicles to avoid the EU fines by the impending deadline.

Under EU rules, Tesla qualifies for “super-credits” which allow a trade-off of electric car sales against ICE vehicles; the company has already managed similar profitable credit trades in California that brought in $280 million dollars in 2017. This number may be where the estimated $500+ million payout figure from Jeffries Financial Group is stemming from. Altogether, the pooling arrangement looks to be a temporary win-win for the two companies, and the deal was reportedly agreed to on February 25th.

Tesla has become a proven leader in developing emissions-free transportation. Since the release of its flagship Model S luxury sedan, the car’s appeal has fueled both the growth of the company – now on its fourth mass-produced electric vehicle with a fifth on the way – and new market demand for electric cars. Tesla’s competitors have taken note and many have committed billions to electrification of their fleets, even without looming EU regulations. US auto industry giant Ford Motor Company, for example, is planning an $11 billion investment into 40 electrified vehicles by 2022, as announced at last year’s Detroit Auto show.

Overall, the “Tesla Effect” on the global market has only begun, and the beginning of the EU’s strict emissions regulations may be the tip of the iceberg of changes coming to the numerous industries impacted by the coming shifts in the automotive arena.

Tesla owners using Autopilot are highly engaged when driving with the feature despite fears to the contrary, according to a study recently published by scientists at MIT titled Human Side of Tesla Autopilot: Exploration of Functional Vigilance in Real-World Human-Machine Collaboration.

The data used in the study was generated from the over 1 billion miles driven by Tesla owners since its activation in 2015, about 35% of which were determined to be assisted by Autopilot. Of these, 18,928 disengagements of Autopilot were annotated, which indicated instances when drivers took over during challenging driving situations. Overall, the numbers demonstrate a high rate of driver vigilance.

Tesla has provided a unique opportunity to form a baseline for objective, representative analysis of real-world use of Autopilot, as stated in the study:

“Due to its scale of deployment and individual utilization, [Tesla’s] Autopilot serves as perhaps the currently best available opportunity to study and understand human interaction with AI assisted vehicles ‘in the wild’…naturalistic driving research can now begin investigating and identify both promising and concerning trends in drivers’ behavioral patterns in the context of Autopilot.”

As automation has expanded over the last several decades, a pattern of overtrust in reliable automated systems has been shown by human behavior research studies. In the context of driving scenarios where property damage, injury, or death are possible consequences, the concern with the transition to semi-autonomous systems relying on driver input to function safely is obviously significant. The results of the MIT study are therefore promising, initially showing an approach to automation in driving systems that’s more careful than other areas.

“The two main results of this work are that (1) drivers elect to use Autopilot for a significant percent of their driven miles and (2) drivers do not appear to over-trust the system to a degree that results in significant functional vigilance degradation in their supervisory role of system operation,” the MIT scientists concluded.

The study further notes that more research will be needed as more data becomes available and more familiarity grows with Autopilot’s features.

Tesla has received a fair amount of criticism and attention whenever an accident involves one of its cars, especially if Autopilot was engaged around the time of the event. However, Tesla consistently maintains its position that the feature is not yet fully autonomous and requires drivers to both pay attention and intervene when necessary while Autopilot is in operation. The program is additionally equipped with several alerts which give drivers audio and visual warnings if hands are not detected on the steering wheel, something found to have been ignored in some prior crash events, playing into concerns the MIT study sought to address.

Beginning in Q3 2018, Tesla has been releasing quarterly Vehicle Safety Reports providing updated numbers for vehicle incidents occurring both when Autopilot was engaged and when the driver-assist feature was deactivated. For Q3, the company reported one accident or crash-like event for every 3.34 million miles driven with Autopilot active and one event for every 1.92 million miles driven with Autopilot disengaged. In Q4 2018, those numbers dropped slightly, possibly due to winter conditions, to one accident for every 2.91 million miles driven with Autopilot engaged and one accident for every 1.58 million miles driven without.

By comparison, the National Highway Traffic Safety Administration’s (NHTSA) most recent data at the time showed a crash event every 436,000 miles, a figure which includes all vehicles in the US whether or not the cars are equipped with driving enhancement software. Tesla’s numbers further include both accidents that have occurred and “near-misses”, and the NHTSA’s figures only include accidents that actually transpired.

Along with touting a correlation between lower accident rates and Autopilot being engaged, Tesla also maintains its title of producing the safest cars in the world based on NHTSA test results.

In a recent announcement, Elon Musk has stated that Tesla’s electric cars will soon be able to support video playback while they are on Park and connected to a WiFi network. This feature will take advantage of a planned upgrade to the Supercharger Network, which will give free WiFi to Tesla owners recharging their vehicles.

Using the Supercharger Network as WiFi hotspots is a pretty strategic move for Tesla, particularly as it will make visits to the charging stations much more enjoyable for electric car owners. Supercharger stops have already gotten more convenient over time with the addition of features like TeslAtari and the rollout of the faster Supercharger V3. With in-car video playback capabilities, wait times in Superchargers will most definitely be even better.

In-car video playback and streaming will truly shine for electric car owners who are conducting long road trips. When traveling great distances, both drivers and passengers are best advised to take brief rests to combat fatigue. During these breaks, passengers of Tesla’s vehicles will appreciate the capability to access and watch their favorite content online while preparing for the next leg of their trip. This is something that travelers already do today, though video streaming is usually done using mobile devices such as smartphones or tablets, both of which have smaller displays than Tesla’s electric cars.

A key statement in Elon Musk’s Twitter post is his emphasis on all Superchargers having free WiFi over time. This is a notable statement since the Supercharger Network has over 12,000 stations (and growing) across the globe today. For Tesla to provide free WiFi to every station, the electric car maker must ensure that it can secure internet coverage in any location worldwide. Fortunately for Tesla owners, Elon Musk’s private space firm, SpaceX, is already making headway into such a project, dubbed Starlink.

SpaceX’s Starlink is a satellite constellation aimed at providing low-cost, high-speed internet connection to anywhere across the globe. SpaceX has been making some headway with the constellation’s deployment, announcing earlier last month that new Starlink satellites will launch from Florida this Spring using the company’s tried-and-tested Falcon 9 rocket. With such upcoming milestones, it might not be too long before SpaceX starts conducting dedicated Starlink launches in the near future.

Elon Musk has not posted the date for the rollout of Tesla’s in-car video playback capabilities, though last August, the CEO responded positively to a request from a Model 3 owner who asked if video streaming services such as Netflix and YouTube will be supported in the future. In his reply, Musk wrote two words: “Version 10.”