Elon Musk has said that automakers don't want to license Tesla FSD. We are beginning to see why.

Tesla CEO Elon Musk has said he has offered to license full autonomous driving to other automakers.
Companies like Ford and Rivian have announced in recent weeks that they will pursue self-driving indoors.
Nvidia has also released a toolkit that lowers the barrier to entry for range tracking.

Elon Musk has called traditional automakers’ reluctance to license Tesla’s Full Self-Driving software “insane,” but a number of industry moves show their reluctance is strategic.

In recent weeks, several automakers have released roadmaps to build key pieces of self-driving software rather than outsource the technology. Because automakers see vehicle technology as a defining component of the brand, a Tesla license can become a hard sell.

Rivian, for example, is deepening vertical integration by designing a proprietary chip for the brains behind the company’s self-driving computer. CEO RJ Scaringe even broached the idea of pursuing a robotaxi business at Rivian’s Autonomy & AI Day in early December.

Legacy automakers aren’t going down the same ambitious path of designing custom chips, but have begun to look for in-house solutions.

Ford announced at the Consumer Electronics Show in Las Vegas that it plans to develop driving software for public roads by 2028. The company said in-house use cuts costs by 30 percent and provides more control over how the software is integrated and implemented.

“To integrate, I can’t do that with all these suppliers,” Paul Costa, Ford’s head of electrical engineering, told Business Insider. “We have to bring these things inside, and it allows us this ability to do the trifecta all at once: smaller, cheaper and higher performance.”

Musk said in an X post in November that it was “crazy” that legacy automakers didn’t want to license Tesla FSD, an advanced driver assistance system (ADAS) that the electric vehicle maker said would enable fully autonomous driving.

“When the legacy vehicle occasionally addresses, they hotly discuss implementing FSD for a small program in 5 years with requirements that are impossible for Tesla to achieve, so useless,” Musk said in the post.

Musk did not specify what those requirements are. A Tesla spokesman did not respond to a request for comment.

Experts who follow the software side of the auto industry told Business Insider that there is a practical reason to go in-house, even if there are short-term challenges.

Chris Ahn, a director at Deloitte, which advises key automakers, told Business Insider that companies need to decide what level of autonomy their customer base will want and how to achieve it, such as using lidar or a proprietary camera system.

“It’s not so much like, ‘I’m taking it in-house because I don’t want to use someone else’s technology.’ But this is a competitive business for them,” Ahn said. “People who own Fords own Fords for reasons that are probably different reasons than people who own Mercedes own Mercedes. And I think each of those automakers is going to have to define what ADAS means to my brand’s user base today.”

Steve Man, senior auto analyst for Bloomberg Intelligence, told Business Insider that self-driving vehicle technology can be thought of as three interconnected parts: software, sensors, and actuators — the components that control the car’s physical movement.

All three components must be able to “talk” to each other within a vehicle platform, Man said, which can be difficult and expensive to achieve when an automaker relies on multiple suppliers.

“It’s actually cheaper to bring everything in-house to integrate those three buckets of stuff,” Man said.

As automakers seek more control over their technology, the tools to build autonomy are becoming more accessible. That makes a Tesla FSD license a less compelling business case.

At CES, Nvidia unveiled Alpamayo, a suite of AI reasoning models, simulation tools, and datasets that automakers can use to develop self-driving technology.

Mercedes-Benz turned out to be Nvidia’s first major customer; The automaker plans to release a Tesla FSD-level ADAS built on Alpamayo by the end of the year.

Alpamayo isn’t full self-driving software that automakers simply plug into. An Nvidia spokesperson told Business Insider that it’s a set of tools that can “consolidate and accelerate an OEM’s own ADAS or autonomy program, whether they’re building end-to-end systems or retrofitting existing architectures.”

Automakers still need proprietary data and talent to implement and develop their autonomous systems.

Hugh Nguyen, a KPMG partner who specializes in self-driving systems, told Business Insider that Alpamayo is “democratizing” AV development by reducing the cost and time to train self-driving systems.

During a question-and-answer session at CES, Nvidia CEO Jensen Huang called the Tesla FSD “completely world-class,” before drawing a distinction between Tesla’s goals and Nvidia’s.

“We’re not a self-driving car company,” he said. “We just want to enable the autonomous industry of the world. Everything that moves should be autonomous.”

Read the original article on Business Insider

Elon Musk has said that automakers don’t want to license Tesla FSD. We are beginning to see why.

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