All this in spite of tremendous uncertainty not just with regards to the regulatory environment but to the not yet fully developed capabilities of their own software.
Tldr: I suspect Tesla know what they're doing with the pricing of this thing.
In a big way. They are using data gathered by the self-driving ready hardware to develop the software that will use it.
Thousands of cars out there collecting data is a huge advantage over groups working with a handful of prototypes.
I'm not sure this is true. At least for Google, it seems like the main bottleneck to progress is engineering time to fix the problems that arise. The problem is not a lack of vehicles driving and finding problems.
I say this because Google has made very little effort to expand their fleet of testing vehicles. The last big expansion, from 28 to 48 vehicles, was in Sept. 2015. Since then they've expanded from 48 to 58, but it doesn't seem to be a priority. [1]
[1] https://docs.google.com/spreadsheets/d/1v0BBTDOXvD8JdhrySFy6...
It just isn't reasonable for Google to build and manage a fleet of that size for a development program. It would cost Google half a billion dollars, but for Tesla it's just a bit of cost they roll into the product.
But saying it's an "autonomous car" because it has the sensors and computers just isn't so. When it gets the software, then it's an "autonomous car."
To use GPs analogy to the iPhone1: If Apple had just shipped the hardware without iOS, it wouldn't have been the iPhone.
Yeah, well... it's not really autonomous. It's a slightly better cruise control + assisted lane change. In fact the "Autopilot" marketing term makes it sound much more like fully autonomous driving than it actually is.
Elon Musk does what he does best alright: make billions. The rest is just educated guesses at best.
At worse, any attempt to "explain" marketing strategy as some sort of passionate drive to improve the technology, or similar, is just so much cold-reading yourself at for the benefit of a commercial company's bottom line.
He's doing what he does best: forcing a hard change on an established system.
Autonomous driving not allowed? Well, we'll give them "Autopilot"-- make sure to keep your hands on the wheel! Nope, it's not autonomous, it's Autopilot! It just happens to have all the hardware needed to be fully autonomous, and Autopilot will "gradually gain new capabilities." Questionable? Sure. Best way to make an extremely hard industry transition? Almost definitely.
It would be a chicken and egg problem if he didn't do this. Can't test the system extensively beyond the lab without regulations, can't have a system that doesn't meet regulations because it hasn't been tested enough yet. He's just sidestepping this dilemma.