Summarizer

Cost Reduction Progress

Industry-wide lidar cost reductions, Tesla's strategy to minimize hardware costs, Waymo achieving better performance with fewer cameras

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The discussion highlights a strategic divide between Tesla’s vision-only approach and the lidar-reliant systems used by competitors like Waymo, framing Tesla's hardware minimalism as a calculated business necessity for mass-market affordability. While some argue that more sensors theoretically provide superior safety, others contend that Tesla’s choice was a brilliant pivot to avoid the prohibitive costs that required deep-pocketed subsidies from parent companies like Google. Ultimately, the comments suggest that Tesla's ability to achieve robotaxi parity in markets like Austin proves that a low-cost, camera-based strategy can successfully challenge high-end, sensor-heavy hardware.

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Tesla never had lidar so they didn't abandon it. Also, Tesla started FSD in 2016. The very core of their strategy was (and is) to sell $40k car with hardware capable of running FSD. Cameras are super cheap, FSD chip is reasonably inexpensive. Lidar is not. Maybe today the cost isn't completely prohibitive (I think it still is, because you need multiple lidars) but it certainly was for the first 8 years of FSD program. Tesla just didn't have the luxury of adding $50k to the cost of the car for the hardware, the way Waymo did. And they didn't have sugar daddy (Google) willing to burn several billions a year for many years. So the Waymo approach was not an option for Tesla. And given that in Austin they just reached parity with Waymo (i.e. completely unsupervised robotaxi service), they are not doing badly.
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> Tesla's choice to abandon lidar will be one of the biggest oof in business history. Why? They have started unsupervised taxi rides in Austin. One of their goals was affordability, and their cars are massively more affordable.
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I fully agree with your first point: Musk has shown tremendous ability to manage companies to become unicorns. He's clearly skilled in this domain. However, if you think about this for 2 seconds with even a rudimentary understanding of sensor fusion, more hardware is always better (ofc with diminishing marginal value). But ~10y ago, when Tesla was in a financial pinch, Musk decided to scrap as much hardware as possible to save on operational cost and complexity. The argument about "humans can drive with vision only, so self-driving should be able to as well" served as the excuse to shareholders.