Tesla's new master plan is the boldest effort yet to upend everything we know about transportation.

Last week Tesla CEO Elon Musk unveiled the company's new Master Plan, an update to a decade-old document that laid out, well, Tesla's master plan. Tesla has more or less executed on that plan, producing the Tesla Roadster, Model S sedan and Model X SUV and now ramping up on the last two portions: the affordable Model 3 car and acquiring SolarCity to meld solar power generation and power storage. It's taken ten years to get to this point — and the Model 3 is still 18 months from starting production (at best) — but Musk is never one to sit back. Here's the new plan, in an expanded nutshell:

  • Integrate solar power generation from SolarCity and power storage from Tesla Energy into one scalable company, reducing the cost of both for consumers.
  • Produce a compact SUV and "a new kind of pickup truck", both all-electric
  • Build an all-electric Tesla Semi heavy-duty cargo truck
  • Develop an autonomous passenger bus for mass transit systems
  • Roll out fully autonomous driving
  • Enable autonomous vehicle sharing for Tesla owners and as a Tesla-owned fleet

While the solar aspect of the plan has the potential to revolutionize/decimate the electric utility industry and have a positive long-term impact on the planet's environment (more solar = less burning things to power lightbulbs) and the compact SUV, pickup truck, and Tesla Semi are addressing additional segments of the automotive market, it's the Tesla Bus and every aspect of autonomy that stand to turn the entire transportation industry on its head.

Autonomy

Autonomy overall is going to have a huge impact on every facet of transportation. A fully autonomous car won't have to maintain the same forward-facing design of current vehicles (as plenty of concept designs from all manner of manufacturers have shown). Autonomy would enable cars to follow more closely on highways, reducing overall congestion while also improving energy efficiency through drafting aerodynamics.

Autonomous cars would even change what our urban landscape looks like — you're driven to where you're going, get out of the car, and the car goes and parks itself in a separate automated garage. Streets won't have to be lined with parked cars and suburban malls won't be ringed by acres of asphalt. Hell, houses won't even necessarily need to have garages anymore; your car could drop you off and then go park and charge overnight at the neighborhood parking deck.

Autonomous cars could even completely change what our urban landscape looks like.

There's a long way to go towards full autonomy, though. Tesla's Autopilot system today is only partial autonomy, best thought of as a highly advanced cruise control. It can hold a lane and pace itself with traffic, and change lanes at the driver's command, but the main thing holding the entire system back right now is not technology — it's data.

So far Tesla cars have driven more than 100 million miles on Autopilot and relayed all of that data back up to Tesla HQ for fleet learning processing. But Tesla expects they'll need ten times that data to enable full autonomous driving (in addition to an expanded sensor and camera array) and their goal is to make a car that is ten times as safe as a human driver. Getting the Model 3 and the other future vehicles into customer hands will be the first step in collecting that data. Today's Autopilot cars are more capable than the software allows — Musk has publicly mused about what kind of huge software improvements could be made with the existing radar hardware, for example.

It's worth noting that the cheaper post-Model 3 Tesla that was promised in early 2016 has been axed in favor of the cost-reduction benefits that full autonomy will bring.

Mass Transit

For one, there's the Tesla Semi and the Tesla Bus. A tractor trailer equipped with Autopilot will not only be a safer vehicle and a cleaner vehicle (as the Volkswagen diesel emissions scandal showed, it's near impossible to make a "clean" diesel vehicle, and diesel exhaust from cargo trucks accounts for 65-90% of vehicle-created pollution), but it will not be constrained by the limits of human drivers — like sleep (though it will have to recharge). And without having to pay human drivers, more but smaller trucks could be used to make more direct deliveries, as well as chaining together for more efficient long-distance travel.

The Tesla Bus, though still a vague one-paragraph concept in the new Master Plan, has the potential to absolutely revolutionize urban transportation. Reading further into the paragraph — smaller buses, no center aisle and no traditional entryway, and fully autonomous — reveals a picture of a new kind of bus.

Why own a car when you can summon a bus at any time, no matter how far you are from a bus stop?

Tesla Bus riders would summon a bus to their location through their phone or on-demand through a bus stop call button. The bus itself, though smaller, would increase passenger density by loading multi-seat compartments from the side instead of front and rear doors and a center aisle, and bus routing would be handled programmatically through the destination demands of riders instead of a defined route and schedule. And, of course, being Tesla it would be a fully electric vehicle. Scaling up the weight and battery to a bus size would likely yield a range in the order of 200 miles at highway speeds, with more range at lower city street speeds — and right now the average city bus drives between 100 and 150 miles in a day.

A bus that can be summoned on demand could greatly reduce the demand for individual car ownership. Why own a car when you can summon a bus at any time, no matter how far you are from a bus stop? But, there's still a case for having access to cars. That Tesla Bus operated by the local municipal transit authority isn't going to drive you to the next city over. For that, you need a car, and possibly the most disruptive part of Tesla's plan: Tesla owners will be able to pool their autonomous vehicle into a fleet of cars that essentially operate as driverless Ubers. When you're at work, overnight while you're sleeping, or when you're away on vacation, your car can be loaned out as an on-demand vehicle for the public.

Tesla expects that the car's ability to be generating income when the owner's not using it (which is the majority of the day) will "significantly offset and at times potentially exceed the monthly loan or lease cost," which will make it cheaper to own a car in total, even if fewer people overall have to own cars because of this. And in cities where there aren't enough Tesla owners to meet demand, Tesla will also operate its own fleet of hail-able autonomous vehicles.

How we get there

Of course, there's a long and expensive way to go towards this future of autonomous driving. Tesla's Gigafactory will have to continue at its frenetic construction pace and Tesla will have to deliver the Model 3 on time and on budget — something they've yet to prove they can do. Truly autonomous cars will require additional technology that's not installed on today's vehicles and much much more data will have to be collected before all parties — drivers, Tesla, insurance, the government — will be fully comfortable with handing over the wheel.

And more than anything it's going to require a rethink of how we approach personal and mass transportation. The smaller, responsive, and autonomous Tesla Bus would need to fully replace an existing route-based bus system to be effective. People, North Americans in particular, would have to get used to the idea of not having to own a car, or at least not having their car nearby in a garage or parking lot or on the street at all times.

There's also always the matter of cost. With the removal of an even-cheaper Tesla from the product roadmap the price of a Tesla is still going to stay in the upper reaches of what's considered "affordable". Even if it can be out making money for you while you're not using it, a $35,000 Model 3 isn't cheap and economies of scale from projects like the Gigafactory will only help to bring down the cost so much.

Tesla's vision is bold and ambitious and potentially world-reshaping. Bringing it to fruition won't be easy.