Tesla is in active discussions with a major automaker to license Full Self-Driving (FSD). While a deal may eventually be signed, it will still be years before we see FSD in a car other than Tesla.
For a while Tesla CEO Elon Musk has said his company is open to licensing their FSD technology to other automakers. During the Q2 2023 earnings call last year, Musk revealed that Tesla was in early discussions with a “major OEM” (original equipment manufacturer) to license FSD, but as recently as the Q4 2023 earnings call back in January, no deal had been sign with Musk suggesting they did not fully believe in the technology’s potential.
Since then the company has released FSD v12, which has shown a viable path to Tesla achieving full autonomy with its vision-based approach.
With the promising release, Musk revealed during Tesla’s Q1 2024 earnings call on Tuesday that the company is now in active negotiations with at least one large automaker to integrate FSD technology into their vehicle lineup.
Musk did not name any names, but went on to say there is a good chance Tesla will sign at least one FSD licensing deal in 2024, and possibly even two.
However, even if these deals do come to fruition, it will still be years before these automakers are able to integrate FSD into their lineup due to their lengthy product lifecycles. According to comments made by Musk, it could take as many as three years.
“They’re talking years before they will put it in their product. We might have a licensing deal earlier than that, but it takes a while. This is where the big difference between us and them is.”
Elon Musk
Tesla’s strategy would involve not only licensing its software but also supplying the necessary hardware – cameras and onboard computers.
If other automakers do climb onboard, Musk likened the shift towards autonomous vehicles to the transition from flip phones to smartphones, implying that traditional automakers risk obsolescence if they ignore the advancements in smart car technology. Musk explained that future vehicles would need to incorporate advanced autonomous features to remain competitive and appealing to consumers.
“I remember back when Nokia was king of the hill for cell phones, and I saw them come out with a smartphone that was basically a brick with limited functionality [compared to] the iPhone and Android. People still did not understand that all the phones were going to be that way. There were not going to be any flip phones. If people don’t understand all cars will need to be smart cars, or you will not sell the car. Nobody will buy it. Once that becomes obvious, I think licensing becomes not optional. It’s license or nobody will buy your car.
