Tesla will aim to introduce autonomous-drive cars by 2016.
Chief executive Elon Musk told the Financial Times that Tesla would aim to cover 90 per cent of driven miles autonomously "within three years".
Tesla is reportedly choosing to develop its own autonomous technology in-house rather than working with an aftermarket-developed system.
The company has already started advertising for engineers to help with the project, with a role on the company's website decribed as "responsible for developing vehicle-level decision-making and lateral and longitudinal control strategies for Tesla’s effort to pioneer fully automated driving".
Volvo is also working on autonomous drive systems, but says that more advanced aspects of the technology won't be seen for up to ten years.