While Tesla‘s Elon Musk has offered to license the company’s Full Self-Driving technology to traditional automakers, most of them aren’t interested. During Tesla’s Q1 earnings call, Musk suggested that one or two licensing agreements might happen in 2024. So far, that hasn’t materialized.
Even Faraday Future’s CEO YT Jia publicly urged Musk to work together on FSD technology because traditional automakers won’t touch it.
Even Faraday Future’s CEO publicly urged Tesla’s Musk to collaborate on FSD technology, as traditional automakers remain uninterested.
The main obstacle is what Tesla requires. The company won’t just hand over software. Automakers would need to adopt Tesla’s camera-only system and special onboard computers. They’d also have to remove ultrasonic sensors from their vehicles.
These changes mean completely redesigning existing car platforms, which costs enormous amounts of money and time.
Beyond the technical challenges, automakers see FSD licensing as a major business problem. They’d be making Tesla stronger in the electric vehicle market while becoming dependent on their competitor for a vital technology.
Most car companies want their own self-driving systems to stand out from others. Accepting Tesla’s solution would throw away years of research their engineers already completed.
There’s also a liability issue. Tesla’s FSD is actually a Level 2 system, meaning drivers must stay alert and ready to take control. Unlike Mercedes-Benz’s Level 3 Drive Pilot, Tesla doesn’t accept legal responsibility if something goes wrong. Global investigations and lawsuits have been launched against Tesla due to its experimental deployment approach with supervised software to everyday drivers.
The U.S. regulators investigated over 2.4 million Tesla vehicles with FSD after reports of cars running red lights and driving the wrong direction. These safety concerns make traditional automakers nervous about putting FSD in their cars.
Instead, major automakers are pursuing different paths. Toyota partnered with Waymo, the self-driving specialist. Lucid is working with Uber and Nuro on robotaxi services in San Francisco.
Rivian focuses on driver assistance features rather than full self-driving. These companies prefer working with established autonomous driving experts instead of their direct competitors.
Musk described recent discussions with legacy automakers as “tepid,” with companies asking for tiny programs spread over five years with requirements Tesla couldn’t accept.
The combination of technical demands, business competition, liability concerns, and regulatory questions explains why major automakers continue to avoid Tesla’s offer.