Tesla’s Self-Driving is Betting on the Scaling Hypothesis
Elon Musk's plan to own virtually all terrestrial transportation by providing low-cost self-driving vehicles is proceeding steadily, if late. It currently depends on further AI progress from scaling.
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With a market capitalization of approximately $1.5 trillion (TSLA) as of January 2026, the U.S. electric vehicle manufacturer Tesla is by far the most valuable auto maker in the world as well as one of the most valuable companies overall.1 Elon Musk has served as CEO of Tesla since 2008, during which time the company has, more than any other, spearheaded the rise of electric vehicles as a viable commercial product and alternative to traditional internal combustion engine (ICE) vehicles. Tesla has also spearheaded another major shift in the design of automobiles: the liberal integration of software and electronics to improve the driving experience for Tesla drivers, which, for many years now, has been expected to culminate in fully autonomous self-driving vehicles with no need for human drivers or intervention. This outcome would be tantamount to an economic revolution in personal, public, and commercial transportation, by eliminating the need for costly and rote human labor in the form of driving.