Tesla Motors (NASDAQ:TSLA) is one of the most innovative and forward-thinking companies in the auto industry today. Still, with accolades like Motor Trend's Car of the Year and a stock price that's increased more than 400% year to date, Tesla refuses to rest on its laurels. If anything, it can't really afford to.

We already know the company plans to sell its first all-electric SUV, the Model X, next year. It intends to follow that with a $35 ,000 electric vehicle for the masses. However, much of this is already baked into the stock's $21 billion market cap .

To put it in context, that's nearly one-third of Ford's (NYSE:F) market value. Yet, Ford generated more than $3 billion  in free cash flow last year, while Tesla was stuck in the red .

The takeaway here is simple: At its current valuation, Tesla's future largely depends on its ability to continue innovating.

Screen Shot

Source: Twitter.

Fast-track to the future
The autonomous car could be Tesla's ticket to sustained success. The company's CEO, Elon Musk announced on Twitter this week that it is working on an autopilot system for its Model S car . Though Tesla joins dozens of other auto manufacturers in developing a driverless experience, Musk is focused on creating a sort of autopilot, as opposed to a fully autonomous car. In an interview with Bloomberg, Musk said: "Self-driving sounds like it's going to do something you don't want it to do. Autopilot is a good thing to have in planes, and we should have it in cars."

Tesla now hopes to make this a reality. In fact, Musk is confident that the company can deliver a (mostly) driverless car within three years, reports the Financial Times. That's much sooner than projections from other automakers, including Nissan, which says it can deliver a semi-autonomous car by 2020 . Google (NASDAQ:GOOGL), on the other hand, hopes to make its technology production-ready within five years .

Screen Shot

Source: Twitter.

Not only does Musk expect Tesla to get this technology to market sooner than others, but he also plans to employ a more affordable technique. "The problem with Google's current approach is that the sensor system is too expensive," Musk explained . Tesla's technology will likely use a combination of radar and tiny flush-mounted cameras. This is a different approach from Google (NASDAQ:GOOGL), whose self-driving cars currently use expensive laser tracking systems that are mounted to the vehicle's roof .

Googles

Source: Wikimedia Commons

A new job listing on Tesla's website calls for an engineer "responsible for developing vehicle-level decision-making and lateral and longitudinal control strategies for Tesla's effort to pioneer fully automated driving ." At least for now, this is a good indication that Tesla plans to develop such capabilities in-house, rather than collaborating with a company such as Google.

Whichever way you cut it, self-driving cars are the future. And given Tesla's track record up to this point, there's a good chance Musk's company will be at the forefront of this change.

Fool contributor Tamara Rutter owns shares of Tesla Motors. The Motley Fool recommends Ford, Google, and Tesla Motors. The Motley Fool owns shares of Ford, Google, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.