US — Ars Technica
Tesla gave up the EV crown. Now it wants to win the autonomy race
Mobility1 min read
Tesla is exploring a merger with Elon Musk's SpaceX, and Tesla is trying to win the self-driving car race. Car makers want to earn steady money from software and AI, not just from selling cars.
What happened
Elon Musk's Roadster, a car that jumped and flipped in the air, went viral this month. Five days later, Musk said Tesla and SpaceX were exploring a merger. A merger means two companies join together. This could speed up Tesla's work on self-driving cars.
Why car makers want software
Selling cars is hard work with thin profits. Software and AI services can keep bringing in money again and again. Analysts call this a kind of golden goose, meaning a source of great wealth. Tesla still earns 75 percent of its revenue from selling cars, so its car business is still very important.
Key numbers
- Tesla sold 1.6 million vehicles last year.
- Musk's old goal was 20 million cars a year by 2030. This goal is now 5 million.
- Car sales bring in 75 percent of Tesla's total revenue.
- The first Tesla Roadster, a battery-powered car, launched in 2008.
Why it matters
Chinese companies now lead in electric cars. They are also investing heavily in software and AI for self-driving. Tesla must compete with them and with big tech firms. Its future may depend on whether its software can earn steady money.
What to watch
- Whether Tesla and SpaceX confirm the merger.
- How well Tesla's Full Self-Driving software improves.
- Whether Tesla can grow from 1.6 million to 5 million sales.
- How Tesla spends on AI to compete with Big Tech rivals.
Glossary
- Full Self-Driving
- Tesla's software name. Despite the name, the driver must still sit in the seat and pay full attention.
- SpaceX
- Elon Musk's rocket and space company, which also made the compressed-gas thrusters used in the Roadster stunt.
- Roadster
- A sports car made by Tesla. The first battery-powered model launched in 2008.