Tesla could have millions of cars on the road by 2023 - taking a huge lead in the self-driving car race

Many more Tesla cars are expected to hit the road during the next few years, and that could give the company a big advantage in the race to develop self-driving cars.

It's estimated that a little more than 200,000 Tesla-made vehicles are on the road today. However, with the launch of the Model 3, that number could balloon to as many as three million vehicles on the road by 2023, Adam Jonas, a Morgan Stanley analyst, said in a note to clients Tuesday.

As the number of Tesla vehicles in use increases, the company will be able to collect more data from its cars that could ultimately be used to improve the company's machine learning technology.

Machine learning is basically a way of teaching algorithms by example or experience, and it's essential to developing the systems necessary for self-driving cars.

Because all of Tesla's cars are equipped with the software and hardware necessary to collect data that can be used to improve its ML system, the electric car company could have a huge edge against other automakers and tech companies working on autonomous vehicles.

"Miles traveled accumulation rises with the car population, helping Tesla to train its machine learning network faster than competitors," Jonas said

"We estimate that Tesla's cars travel a bit more than 7 million miles per day, a figure we forecast to reach 100 million miles by the 2023 or 2024 time frame, a level on par with what we estimate Uber's fleet is executing on a daily basis today. In our view, firms that can capture sufficient quantity and quality of miles data will be in a strong position to develop competitive autonomous transport networks," he said.

In the more near term, Jonas, who has a $317 price target for Tesla's stock (which is trading at about $347) with a rating of equal weight, estimates that there will be 300,000 Tesla cars on the road by the end of this year and 531,000 vehicles in use by the end of 2018.

Tesla CEO Elon Musk has not been shy about his plan to develop a fleet of self-driving cars. Last year, Musk said in his "Tesla Master Plan, Part Deux" that he aims to eventually roll out a car sharing program that enables Tesla owners to make money by renting out their autonomous car.

The company has since dubbed the service the "Tesla Network" and is expected to reveal more details about the service sometime this year.

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