Tesla CEO Elon Musk Says FSD Level 4 Likely Next Year

Tesla Inc TSLA Elon Musk said on Tuesday he believes the electric vehicle maker is likely to actualize the full self-driving level 4 system next year.

What Happened: Musk said that the rate of disengagement has been dropping rapidly in FSD Beta and it is likely to achieve a significantly lower rate of accidents than an average human next year.

The rate of disengagements — for example, where a driver would intervene to prevent the car from doing something dangerous potentially — per million miles has been dropping dramatically, Musk told artificial intelligence researcher and popular podcaster Lex Fridman on Tuesday.

Musk was quick to add that Tesla would then have to prove the capabilities to regulators.

See Also: NTSB Says Tesla's Use Of Term Full Self-Driving is 'Irresponsible,' should Address 'Basic Safety Issues' First

“Then there's going to be a case of, okay, we now have to prove this to regulators… I think it's got to be at least two or three times safer than a human, so two or three times lower probability of injury than a human.”

Why It Matters: Tesla’s self-driving capabilities have often come under the regulatory spotlight. In May, legal transparency group PlainSite said Musk had overstated the capabilities of the company's advanced driver assist system, a precursor to FSD.

The head of the National Transportation Safety Board (NTSB) in September objected to Tesla's use of the term ‘full self-driving” and added that the company needs to address some significant safety concerns.

There are five levels of automation under standards created by SAE International. A Level 4 system implies the vehicle can handle all aspects of driving without human intervention. Tesla is currently at Level 2.

See Also: Elon Musk, Lex Fridman See Language Evolving With Help Of Artificial Intelligence

Earlier this month, Germany’s Mercedes-Benz said it has secured Level 3 autonomous driving that will let drivers take their hands off the steering wheel in slow-moving traffic.

Price Action: Tesla shares closed 0.5% lower at $1,088.47 a share on Tuesday. The stock is up over 49% year-to-date though most of that surge has been seen in the past few months.