TSLA Tesla Inc

Tesla Motors Inc. has begun equipping all of its vehicles with hardware to make the vehicles fully self-driving and Chief Executive Officer Elon Musk expects to demonstrate a self-driven cross-country trip by the end of next year.

"As of today, all Tesla vehicles produced in our factory—including Model 3—will have the hardware needed for full self-driving capability at a safety level substantially greater than that of a human driver," the company said in a statement, referring to its coming midprice sedan. The high-end Model S and Model X with the hardware are already in production, while the Model 3 is slated for delivery late next year.

The software that would make Tesla vehicles fully self-driving still needs to be validated, and the system hasn't been approved by regulators.

The new hardware will initially lack the same capabilities as Autopilot, the company's current semiautonomous feature, as the company works to calibrate the new system. That should take two or three months, Mr. Musk told reporters on Wednesday. After that, he said, the company plans to improve its autonomous capabilities every two or three months.

Mr. Musk's goal is to demonstrate travel in fully autonomous mode from Los Angeles to New York City by the end of next year, he said.

Tesla's effort to introduce the next generation of autonomous driving capability comes as the auto maker faces increasing scrutiny over the semiautonomous Autopilot system already installed in its vehicles. The current version, which is enabled in Tesla vehicles built after October 2014, uses cameras, sensors and radar to control vehicle speed and steering under certain driving conditions. While not a fully self-driving system, it is regarded as a major step toward that end.

However, regulators worry that the technology lulls drivers into complacency behind the wheel. Germany's Transportation Ministry has asked Tesla not to use the term Autopilot in ads describing the system, and the California Department of Motor Vehicles has issued draft rules that would prohibit the use of "autopilot" in marketing materials for systems similar to Tesla's current capabilities.

U.S. regulators are investigating a fatal crash that occurred in May in Florida, which Tesla has said was the first known fatality involving Autopilot. An update to Autopilot's software last month may have prevented that crash, Mr. Musk has said. The changes included making the system more reliant on radar to navigate.

Since the May crash, Tesla and auto-parts supplier Mobileye NV, a leading company in providing semiautonomous driving technology, have disagreed publicly about whether Autopilot is being used appropriately. The supplier took the unusual step of saying it had warned Mr. Musk more than a year ago about its safety concerns in allowing Autopilot to be used for hands-free control of vehicles. Tesla chalked up the disagreement to Mobileye being threatened by its own in-house development of a computer-vision system.

The new system has eight cameras, compared with one in previous Tesla vehicles, providing 360 degrees of visibility up to 250 meters in range, while the onboard computer has more than 40 times the computing power of the previous generation, according to Tesla.

Write to Tim Higgins at tim.higgins@wsj.com

(END) Dow Jones Newswires

October 19, 2016 21:45 ET (01:45 GMT)

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