Key facts
- Tesla aims for AI and software to become its next profit engine.
- The company's "Full Self-Driving" (FSD) software is seen as a high-margin segment.
- Over 75% of new Teslas sold in North America have the supervised FSD.
- Tesla has 1.7 million active FSD subscriptions globally, up 67% from a year ago.
- A potential merger with SpaceX could accelerate AI and autonomy research.
Tesla is increasingly focusing on artificial intelligence and software services, such as its "Full Self-Driving" (FSD) system, as a key driver of future revenue and profit, aiming to replicate the high margins seen in the tech industry. The company's CEO, Elon Musk, is exploring a potential merger with SpaceX to accelerate advancements in autonomous driving technology and bolster its competitive position against rivals.
Analysts believe that Tesla's FSD technology, despite requiring human supervision, is already its highest-margin business segment and could "transform the whole financial model" if its adoption rate increases significantly. This strategic shift comes as traditional automakers grapple with intense competition, particularly from Chinese EV manufacturers, and seek to diversify their revenue streams beyond vehicle sales.
While Tesla ceded its position as the world's largest EV maker to BYD last year, Musk claims the company remains ahead in autonomous technology. However, realizing the full potential of FSD faces regulatory hurdles in multiple markets, with Tesla seeking wider EU backing for its system.