Musk Teases Major FSD Upgrade as Tesla Battles Slumping Sales

On Wednesday, Tesla CEO Elon Musk announced on social media that the company is currently training an entirely new Full Self-Driving (FSD) model, which could be ready for public release by late next month.  

"Tesla is training a new FSD model with 10X params and a big improvement to video compression loss," Musk stated. "Probably ready for public release end of next month if testing goes well."  

FSD is a semi-autonomous driving system combining AI-powered data, software, and hardware designed to enable Tesla vehicles to navigate with minimal human intervention. However, drivers must still keep hands on the wheel, ready to take over steering or braking at any moment.  

The system represents an upgraded version of Tesla's existing Autopilot driver-assistance feature, which has already launched in Europe and China. FSD relies on AI models that process input from vehicle cameras and sensors to perceive surroundings. Musk's reference to "10x more parameters" suggests a substantially larger model trained on more data, with corresponding performance gains.  

In an increasingly competitive EV market, FSD serves as Musk's key pillar for driving both Tesla's revenue growth and technological leadership. This year, Tesla has already launched its Robotaxi service in Austin, Texas.  

Yet markets remain focused on Tesla's core business challenges. Q2 automotive revenue fell 16% year-over-year to $16.661 billion, with European deliveries declining sharply. Combined with reputational damage from Musk's severed ties with former President Trump, Tesla's stock has plunged nearly 24% year-to-date.  

Separately, Musk revealed Tuesday that his AI firm xAI would open-source its Grok 2 chatbot next week, continuing his transparency push in artificial intelligence. "It's high time we open sourced Grok 2. Will make it happen next week." he wrote.

Musk initially pledged to open-source the model in October 2024, stating at the time: “As we create the next version, we open source the prior version, as we did with Grok 1 when Grok 2 was released.”  

Tesla shares (TSLA) has risen over 2% to the FSD announcement. However, the stock remains down 16% YTD versus Nasdaq's 8% gain.