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Hello and welcome to SAE Tomorrow Today Unplugged. I'm your host, Grayson Brulte.
Today’s topic is: Is Tesla Creating the Autonomy Business Model of the future?
Will the future of autonomy become licensing?
Will Tesla license their FSD stack to other companies interested in autonomous driving?
Will Waymo follow suit and license the Waymo Driver to JLR?
Perhaps.
After all, GM is doing this with Cruise now. Cruise is licensing their IP and autonomous driving technology to GM. GM is working on a personally owned autonomous vehicle as they know that there is consumer demand for this type of vehicle.
While there is demand, not every company has the time or resources to develop a fully autonomous driving stack. But Tesla does and they have a few competitive advantages:
1. Millions of real-world miles
2. The DoJo Computer
No one else has the amount of real-world miles that Tesla has. At some point in the future, these miles will become pivotal to solving SAE Level 4 as not all miles are created equal.
While simulation plays a role in developing autonomous vehicles, it’s not the same as real-world data that Tesla is gathering on the roadways each and every day around the world.
While some might debate this assumption and it’s a good debate, at the end of the day it will come down to resources and Tesla has those.
Tesla generated $81.4 billion in revenue in fiscal year 2022.
As of Q1 2023 the company has $22.4 billion in cash with only $5.57 billion in debt.
With interest rates currently at 5.25% and more rate interest hikes coming, Tesla is poised to generate an additional $1.17 billion in revenue over the next 12 months due to the interest rate environment.
This is a healthy amount of additional revenue which will further propel Tesla forward.
Tesla is defining what the future of mobility will look like by creating a product that is loved by consumers. Love is creating loyalty as Tesla sold 1.3 million vehicles in 2022 and is projected to sell 1.8 million vehicles in 2023.
In a June 15th report from RBC Capital, analysts upgraded Tesla from $212 to $305 based on the potential for Tesla to generate a significant amount of revenue from a robo-taxi business.
They further believe that this robo-taxi business could eventually make up 70% of Tesla’s value in the future.
In the report the analysts highlighted the potential for licensing revenue and called Tesla’s recent announcements with Ford and GM for super charging the “trojan horse” that will enable software licensing in the future.
That’s right software licensing.
Tesla could become Arm of autonomy.
Develop the technology, patent it and then license it.
Waymo could do the same with their fully autonomous driving stack.
This would be in addition their robo-taxi and trucking businesses.
Perhaps with Waymo it could be for personally owned autonomous vehicles only.
Let the OEMs such as JLR create personally owned autonomous vehicles.
While Waymo focuses on the Waymo Service and licensing, GM could do the same with Cruise’s autonomous driving stack. But will they?
I doubt that as they would not want to accelerate a competitor’s autonomy, unless Tesla starts licensing their tech to GM’s competitors. Will GM follow suit?
Who knows, but we do know that it will be interesting to watch how this all plays out.
Is licensing the future of autonomy?
Let us know by sending an email to podcast at sae.org. That’s podcast at sae.org.
Today is tomorrow, Tomorrow is today, the future is licensing.
If you enjoyed this SAE Unplugged, follow me on Twitter @gbrulte or send a note to podcast (at) sae.org, We look forward to hearing from you.
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