Tesla (NYSE: TSLA) CEO Elon Musk has said that he is happy to open up the company’s self-driving technology to other automakers. Last month only Tesla said that starting next year it would open up 12,000 of its Superchargers for Ford vehicles.
Musk, who has reclaimed his position as the world’s richest person said Tesla wants to be “as helpful as possible” while responding to General Motors CEO Mary Barra who said that EVs priced between $30,000-$40,000 won’t be profitable until the end of the decade.
Notably, the EV operations of both Ford and General Motors are losing money. While Ford expects its EV business to lose a whopping $3 billion this year, General Motors expects its EV business to be profitable only by 2025.
Ford backed out from fully autonomous cars
That said, when it comes to self-driving tech, Ford and General Motors have taken divergent paths. Last year, Ford backed out from L4 autonomous driving and wrote off its $2.7 billion investment in Argo AI.
During the Q3 2022 earnings call, Doug Field, Ford’s chief advanced product development and technology officer said, “Commercialization of L4 autonomy, at scale, is going to take much longer than we previously expected.”
Field added, “L2+ and L3 driver assist technologies have a larger addressable customer base, which will allow it to scale more quickly, and profitability.”
Autonomous driving companies are burning a lot of cash
Notably, autonomous driving companies are burning a lot of cash and according to Ford’s CEO Jim Farley despite spending a cumulative $100 billion no player in the industry has been able to figure out a profitable business model.
That said, General Motors is not backing out from autonomous driving and has a subsidiary Cruise which among others counts Microsoft as an investor.
Alphabet too has an autonomous subsidiary named Waymo while Apple has long been rumored to be working on EVs and autonomous driving under a project code-named “Titan.”
Musk offers to open up Tesla self-driving to others
In a tweet, Musk said “Now, we are enabling other companies to use our Supercharger network. Also happy to license Autopilot/FSD or other Tesla technology.”
Last month Musk and Farley announced the Supercharging collaboration in a live Twitter Space.
The partnership between the two companies goes beyond the agreement and Ford said that its next generation of vehicles which would be launched towards the middle of the decade would have charging ports compatible with Tesla which would eliminate the need for adapters while charging the vehicles.
Farley pointed to the different charging ports in EVs and said, “It seems totally ridiculous that we have an infrastructure problem, and we can’t even agree on what plug to use.”
He added, “I think the first step is to work together in a way we haven’t, probably with the new EV brands and the traditional auto companies.”
Tesla’s self-driving has been controversial
Meanwhile, Tesla’s self-driving has been controversial including the very terminology FSD or “full self-driving” as the technology is nowhere near fully autonomous as the name might suggest.
In February, Tesla recalled 362,758 vehicles due to safety concerns over the FSD software. According to the NHTSA (National Highway Transport Safety Administration), the affected vehicles can “act unsafe around intersections, such as traveling straight through an intersection while in a turn-only lane, entering a stop sign-controlled intersection without coming to a complete stop, or proceeding into an intersection during a steady yellow traffic signal without due caution.”
Tesla recalled several cars this year
The safety recall report added, “the driver is responsible for operation of the vehicle whenever the feature is engaged and must constantly supervise the feature and intervene (e.g., steer, brake or accelerate) as needed to maintain safe operation of the vehicle.”
Tesla did an over-the-air update to address the issue. Meanwhile, Tesla CEO Elon Musk believes that it was not a “recall.” Musk, who also owns Twitter, tweeted, “The word ‘recall’ for an over-the-air software update is anachronistic and just flat wrong!”
Other criticisms of Tesla self-driving
During the Super Bowl earlier this year, Dawn Project released a 30-second ad that criticized FSD’s allegedly deceptive marketing. The video showed a Tesla Model 3 allegedly running on FSD and said, “Tesla Full Self-Driving will run down a child in a school crosswalk, swerve into oncoming traffic, hit a baby in a stroller, go straight past stopped school buses, ignore do not enter signs and even drive on the wrong side of the road.”
Last year, former US presidential candidate Ralph Nader called for a ban on FSD. Nader said, “I am calling on federal regulators to act immediately to prevent the growing deaths and injuries from Tesla manslaughtering crashes with this technology.”
The NHTSA is investigating several cases of fatal crashes allegedly involving the FSD.
There have been multiple instances of Tesla cars ramming into stationary emergency vehicles – including one such incident in 2023.
Tesla stock has doubled in 2023
Despite all the noise and controversies, TSLA stock has doubled in 2023 and is among the best-performing S&P 500 stock. The stock tumbled on the first trading day of 2023 after it missed Q4 2022 delivery estimates, but has since rebounded.
Last year Tesla raised the FSD price by 50% to $15,000 and Musk believes that the software’s price would eventually rise to $100,000.
Bulls like Cathie Wood like Tesla stock for its software capabilities. She incidentally expects TSLA stock to rise to $2,000 by 2026 under her base case scenario.
Her target price would imply a market cap of around $5 trillion. Apple, which is the biggest company globally hit a market cap of $3 trillion last year but hasn’t been able to hit the milestone since then.
That said, Tesla opening up its self-driving tech to other companies would help the company increase its revenues as well as profitability.
Musk has previously said that the software business is very profitable and the revenues almost entirely flow to the gross profits.
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