Hyunjoo Jin & Nivedita Balu

(Reuters) – Tesla (NASDAQ) CEO Elon Musk stated Wednesday that the most important product this year and the next is not cars. Instead, it will be software to drive them autonomously, and a robot humanoid, which the company plans to use in its factory.

The bold promises of the most well-known billionaire in electric cars face significant challenges from regulation to technology. Tesla and the other companies involved in auto technology have been unable to meet their goals for self-driving vehicles for many years.

Craig Irwin, analyst at Roth Capital Partners said that while he loves the idea of them pushing the boundaries, he thinks they are too aggressive.

Musk is known for his ability to defy skeptics through working in the rocket and electric car industries. Tesla drivers purchase $12,000 self driving packages with the hope that autonomy will be available soon. More than 60,000 Tesla drivers have been testing self-driving technology on an unprecedented scale, something that is not possible for other autonomous vehicle software providers.

Musk said, “I would be shocked” if full autonomous driving is not made safer than humans this year. Musk stated, “I would be shocked,” and predicted that full self-driving will become Tesla’s most profitable source of revenue.

He said robotaxis is “nutty” from a financial perspective, and that it would increase the vehicle’s utility by fivefolds, since owners could send their vehicles out for work whenever they are not in use.

Tesla employs cameras and artificial Intelligence, and avoids radar and lidar like Waymo. This approach is gaining popularity.

“You must not be able only to see someone, as right in front you. You have to do it with 99.9999999999% reliability. Austin Russell, the CEO of lidar manufacturer Luminar told Reuters that even running over someone one time is unacceptable.

Philip Koopman from Carnegie Mellon University, who is involved in autonomous vehicle safety research, stated that there are many unusual cases at large.

He said, “Without an experienced human driver to manage safety in novel circumstances where machine learning hasn’t been learned yet, it is very difficult to assure safety in an automated vehicle.”

REGULATION

Tesla, even if its technology is successful, would be subject to more stringent scrutiny by regulators before it deploys fleets free-roaming robotaxis. After accidents involving Tesla vehicles, and emergency vehicles parked nearby, U.S. safety regulators launched a safety probe into Tesla’s advanced driving assistant system.

While federal vehicle safety regulators have provided guidelines for states, they did not provide comprehensive standards that govern self-driving cars.

Koopman stated that there are certain states that require the approval of a fully-autonomous vehicle.

Musk stated that he is “highly confident” the car can drive itself reliably with more reliability than humans this year, just one year ago during earnings calls.

CJ Moore (the Tesla autopilot engineer), told CJ, the California regulator, that Musk’s tweet regarding self-driving technology last year “doesn’t reflect engineering reality.”

Musk stated that engineers are currently working on Optimus, a robot-like humanoid designed to move items around a factory.

Raj Rajkumar is a professor at Carnegie Mellon University in electrical and computer engineering. He said that robots are not the best way to perform repetitive and dangerous tasks.

Musk believes that the robot is more valuable than a vehicle, however. Musk said that he believes the robot could be even more important than the car business in the future.

Editing by Gerry Doyle and Peter Henderson