Why “Sunshine Driving” Will Make Millionaires

To understand how innovative the automotive business has become in less than five years, you might consider this fact: The internal combustion engine that drives almost all cars has not changed in any major way for more than 100 years…

It is still basically the same device that would have come in your 1916 Ford.

It makes more heat out of fuel than anything else and is able to muster only a fraction of the energy in a gallon of gasoline to move a car forward.

But in 2013, the first great automobile revolution occurred.

That was when Tesla Motors introduced an electric passenger vehicle that Consumer Reports called the best it had ever tested—by a longshot.

Within two years, Ford had declared it too would become an electric automobile company. Every major manufacturer was scrambling to develop an electric drive system powered by batteries.

Just look carefully at the engine in your present car — it’s a horrifying tangle of bolted on parts, wires, belts and hoses…

Electric autos have a motor with one moving part.

But another automotive revolution is creeping into our everyday existence…

That auto revolution is self-driving cars.

Today, you can get behind the wheel of a Tesla Model S or Model X and, using your voice, command the car to drive itself down the highway. (Tesla recommends that you stay at the ready to take charge, just in case.)

I recently rode in a new Tesla S from San Francisco International Airport to Mountain View, California, with a Silicon Valley venture capitalist.

For nearly the entire trip, he didn’t touch the wheel, the accelerator or the brakes. When we got to his home, the car parked itself in the garage. He charges his Tesla from a small solar array hidden in his backyard.

“I drive on sunshine,” he says.

The obvious point of this little story is that cars that mostly drive themselves are already part of everyday life for many people.

Automakers are taking notice.

Nissan will introduce a van in Japan next year that completely controls braking, throttle and steering on two-lane roads. It will expand the application to Europe in 2018.

Cadillac has said for two years that it would have semi-autonomous driving capabilities by now, but has delayed the introduction until next year. The 2017 Mercedes E class will be nearly self driving. Audi has cars that can drive themselves too.

But Tesla is way ahead of everyone else because it has the big data to support self-driving.

Every evening, every Tesla downloads its real-world driving experience and sends the data to Tesla headquarters wirelessly. That all feeds into a database that Tesla engineers use to perfect their system.

Real-world driving is the information needed to make the difference between so-so and near-perfect self-driving capabilities.

And only Tesla has a huge database to do it.

Google can boast about the 1.5 million miles its driverless cars have driven so far, but Tesla can get that kind of data in a single 24-hour period. Unlike Google’s 75 or so self-driving autos collecting data, Tesla has more than 140,000 cars on the road.

It is exactly that big data that makes Apple’s move into driverless cars seem way too late to be successful.

Automotive innovation is moving so fast that any company these days can make a car that drives itself. But no company except Tesla can collect the data needed to make it truly safe.

Yes, the feds are investigating two accidents in which Tesla autos that had Autopilot engaged got into accidents, including a fatal one. Elon Musk has made the point that Tesla’s Autopilot has probably saved many more lives by driving better than the owners of the vehicles.

No car is fully self-driving yet. But statistically, driving in a Tesla with autopilot engaged is far safer than controlling the car yourself.

Many observers are now saying that within a mere five years you may not need a driver’s license to drive a car.

To your health and wealth,

Stephen Petranek
for The Daily Reckoning