"The Buzzworthy News from Tesla's Earnings Report that's Engaging Analysts"

Tesla Plans to Share Full Self-Driving Capabilities with Other Automakers

Elon Musk Opens Discussions with Original Equipment Manufacturers

During an earnings call, Tesla CEO Elon Musk announced that the company is open to sharing its full self-driving technology with other car manufacturers. Musk revealed that Tesla is already in early discussions with a major original equipment manufacturer (OEM) about using Tesla's full self-driving software and hardware. This announcement has sparked interest among Wall Street analysts. While some see this as a positive move for Tesla, others have raised concerns about the logistical challenges and whether Tesla would need to be more involved in the full software system of its peers.

An Important Change in Scope for Tesla

Morgan Stanley's Adam Jonas believes that if Tesla were to license its full self-driving (FSD) technology, it would represent a significant change in scope for the company. Jonas thinks that vehicle autonomy is likely to result in a winner-take-all or winner-take-most outcome on a regional or local level. He sees this potential licensing of FSD as an important development in how investors measure Tesla's total addressable market (TAM).

Fueling the AI Craze on Wall Street

The prospect of Tesla sharing its FSD capabilities has added fuel to the artificial intelligence (AI) craze on Wall Street. Goldman Sachs analyst Mark Delaney sees Tesla as well positioned in AI due to the expertise of its engineers and the vast amount of data it has collected. However, Delaney believes that the realization of Tesla's FSD aspirations will take time.

High Expectations and Uncertainties

Evercore ISI's Chris McNally describes Tesla's FSD capabilities as the "next hot topic." However, McNally points out that there is a high bar for the yet-to-be-proven autopilot software. Meanwhile, Canaccord Genuity's George Gianarikas commends Tesla's focus on expanding its units and prioritizing high-value, high-margin FSD software over immediate gross margin gains. Overall, while Tesla's plan to share its full self-driving capabilities is generating excitement, there are still uncertainties and challenges that need to be addressed for this vision to become a reality.

Conclusion: Tesla's Self-Driving Sharing Initiative and its Impact on New Businesses

Tesla's announcement of its willingness to share its full self-driving (FSD) capabilities with other automakers has generated significant interest and excitement among industry experts and investors. This development could potentially have profound implications for new businesses operating in the autonomous vehicle space. The move represents a notable change in scope for Tesla, as it opens up the possibility of licensing its FSD technology to other original equipment manufacturers (OEMs). This creates new avenues of collaboration and partnership for entrepreneurial ventures seeking to leverage self-driving technology in their own vehicles. On one hand, this announcement fuels the ongoing artificial intelligence (AI) craze on Wall Street and reinforces Tesla's position as a frontrunner in AI, given their strong engineering expertise and extensive data collection. However, there are also uncertainties and challenges that new businesses should consider. The yet-to-be-proven autopilot software sets a high bar for Tesla's FSD capabilities. It remains to be seen how effective and reliable the technology is in real-world scenarios, which could impact the perception of Tesla's brand and the willingness of other OEMs to adopt their self-driving solutions. Nevertheless, the potential opportunity to access Tesla's FSD technology can provide new businesses with a competitive advantage and open up potential partnerships with major automakers, allowing them to enter the autonomous vehicle market more quickly and with reduced R&D costs. Overall, Tesla's plan to share its self-driving capabilities presents an intriguing prospect for new businesses in the automotive industry. However, careful assessment, continual monitoring of Tesla's progress, and addressing the uncertainties are imperative to successfully navigate this evolving landscape. Article First Published at: https://www.cnbc.com/2023/07/20/the-one-piece-of-news-from-teslas-earnings-report-thats-got-analysts-buzzing-.html