Tesla on Monday unveiled its custom computers now installed on its cars and said the hardware would be able to drive its cars by the end of next year, pending approval from lawmakers.

"We expect to be confident enough...where we think people do not need to touch the wheel (or) look out the window, sometime probably around the second quarter of next year. We expect to get regulatory approval—at least in some jurisdictions—toward the end of next year," Tesla CEO Elon Musk said at a conference for investors.

Musk and his engineers outlined an ambitious plan for custom computers that could plan, drive, and learn from the roads.

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Tesla installed its "full self-driving" computers on Model S and Model X cars last month, and began installing those computers on Model 3s this month. Tesla engineers said that even without its Autopilot software running—or even included on the car—the cars' cameras and sensors would feed data into the automaker's computers to teach other cars how to drive.

The so-called "neural network" uses human annotators to identify cars, pedestrians, and objects in the road from data fed into the computers from other drivers. Eventually, engineers said the neural network would even begin to learn itself based on anomalies in the road.

Tesla said its engineers began development on the custom computers, which are built by Samsung, more than three years ago. The computers are roughly the same size as older computers in Tesla cars already, and use the same power. It's unclear if older Tesla cars could be upgraded with new computers.

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The custom computer is basically two separate computers that verify with each other and rely on the neural network to train the hardware to adapt and respond to different road events. Tesla responded to criticism that it was behind in simulated miles for its computers by saying that real-world data collected by its cars—either with or without Autopilot—was far more valuable.

"The real-world is really weird and messy," Musk said.

Musk also responded to criticism that his cars skipped laser-based lidar sensors in favor of lower-cost radar sensors.

"Anyone relying on lidar is doomed…(they are) expensive sensors that are unnecessary." He said. "It’s friggin’ stupid. It’s worthless."

Critics have said that Tesla's heavy reliance on camera-based systems won't work in poor weather.

Tesla ride-hailing app

Tesla ride-hailing app

Musk also laid out plans for the automaker's automated ride-sharing service, which he called a "robotaxi." The system would let owners add or remove their Tesla cars from the robotaxi service, and split revenue with Tesla—up to 30 percent. Musk said the company could build cars without steering wheels or control systems within three years.

"If we need to accelerate that timeline...we can. We can just delete parts," he said.

Tesla ride-hailing network

Tesla ride-hailing network