Tesla will allow owners a one-time transfer of FSD to another Tesla, but only third Q3
MKBHD/Twitter
In a landmark second-quarter earnings call, Tesla reported revenue of $24.9 billion and a net income of $2.7 billion, considerably surpassing Wall Street estimates. But catching many by surprise was the company allowing a one-time opportunity for customers to transfer their Full Self-Driving (FSD) package during the next three months.
This topic has dogged Tesla and Elon Musk for years, and rightfully so. The price of FSD has skyrocketed. Therefore any early adopters of the technology that got it for the bargain basement price of $5,000 would have to pay triple that fee if they wanted to update their Tesla. In May, the company posted on Twitter asking for improvement ideas. The ability to transfer FSD was high on the list.
Once again during the earnings call, a question about FSD transferability arose. Musk revealed that, in response to customer demand, Tesla would permit the one-time transfer of FSD for the duration of Q3. This opportunity would allow existing Tesla owners to upgrade to a new Tesla model without repurchasing the costly FSD package, which sells for $15,000 in the US.
Tesla Hints at Potential FSD Licensing Partnership
In the same earnings call, Musk indicated another groundbreaking initiative on the horizon. He revealed early talks of licensing Tesla's FSD technology to another major automaker, without disclosing specifics.
This prospective collaboration underscores Tesla's unique standing in the autonomous vehicle market. Musk emphasized the crucial role of Tesla's extensive road data, gathered through its Autopilot and Dojo projects, in its success. This invaluable pool of data, unmatched by any competitor, underpins Tesla's rapid progress in AI development and its leading position in the industry.
Listen to Tesla's Earnings Call
You can listen to a replay of Tesla's earnings call below.
FSD Transfers and Future Expectations
The decision to allow FSD transfers during Q3 is anticipated to drive a spike in Tesla sales. Owners have traditionally been reluctant to upgrade their Tesla vehicles, as the high cost of the FSD package — coupled with its non-transferability — made such upgrades financially unattractive. This unprecedented concession, combined with Tesla’s existing FSD monthly subscription service in the U.S., is expected to enhance Tesla's market appeal and profitability in Q3 significantly.
Tesla used the Q2 earnings call platform to share another impressive milestone: vehicles equipped with FSD beta have driven more than 300 million miles. The significance of this achievement extends beyond its impressive scale. It represents a wealth of data collected for training Tesla's autonomous systems, further improving the safety and performance of FSD.
Requirements for FSD Transfer
Tesla has now posted the requirements for the transfer of FSD to another vehicle, according to Twitter user, @Kdahlenburg
The requirements are below:
We are pleased to inform you that as a loyal Tesla owner with Full Self Driving capability, you may be eligible to participate in our current transfer program. We appreciate your continued support and dedication to sustainable transportation.
Program: Receive Full Self Driving capability on any new Tesla vehicle delivered between July 20, 2023 and September 30, 2023 when you forfeit the Full Self Driving capability on your current Tesla vehicle.
Subject to the below terms and conditions. Tesla does not guarantee delivery within the program's end date.
Terms and Conditions:
In order to be eligible for this program, you must:
1. Be the legal and registered owner of Tesla vehicle that currently has Full Self Driving capability included at the time of delivery of the new Tesla vehicle. The vehicle cannot be the subject of a pending cancellation or buyback request. For EMEA only: Those on an Operational Lease with third-party Lease and Fleet Management companies are ineligible, unless they first purchase the vehicle from the leasing company.
2. Take delivery of your new titled Tesla vehicle between July 20, 2023 and September 30, 2023.
3. Accept the forfeiture of the Full Self Driving capability on your current Tesla vehicle.
Alternatively, you can choose to trade-in your current Tesla vehicle altogether directly with Tesla when you purchase your new Tesla vehicle. Tesla will remove Full Self Driving capability from your current Tesla vehicle up to one week before your scheduled delivery day for your new Tesla. During this process, your current vehicle will automatically reboot for a few minutes after put in park.
4. The Full Self Driving capability can only be transferred once and so cannot be transferred to another vehicle or to another person even if the vehicle is privately sold. This offer cannot be combined with any other promotion, and is not redeemable for cash.
5. Tesla reserves the right to change, modify, or terminate this offer at any time without prior notice.
6. The forfeiture of Full Self Driving capability on your current vehicle is non-reversible after you take delivery of the new Tesla vehicle, or we remove Full Self Driving capability from your current vehicle, whichever occurs first. This remains non-reversible even in the event that you cancel or reverse your purchase after you have taken delivery.
7. Used vehicles and vehicles for commercial purposes are not eligible for this program.
8. Tesla may remove the Full Self Driving capability from your new vehicle if it determines in good faith that you have breached any of these terms or made any misrepresentations about Full Self Driving on your current vehicle.
9. This offer cannot be applied retroactively after the new Tesla vehicle is delivered.
Please read the terms and conditions above carefully. By signing this binding acceptance letter, you acknowledge that you understand and agree to the terms and conditions outlined above.
To accept this offer, please complete the information below, sign, and return this letter to your Tesla Sales Advisor before delivery of your new Tesla vehicle.
Vehicle Identification Number (VIN) of the Tesla vehicle with forfeited Full Self Driving capability: ...
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At the 2025 Consumer Electronics Show, Nvidia showed off its new consumer graphics cards, home-scale compute machines, and commercial AI offerings. One of these offerings included the new Nvidia Cosmos training system.
Nvidia is a close partner of Tesla - in fact, they produce and supply the GPUs that Tesla uses to train FSD - the H100s and soon-to-be H200s, located at the new Cortex Supercomputing Cluster at Giga Texas. Nvidia will also challenge Tesla’s lead in developing and deploying synthetic training data for an autonomous driving system - something Tesla is already doing.
However, this is far more important for other manufacturers. We’re going to take a look at what Nvidia is offering and how it compares to what Tesla is already doing. We’ve done a few deep dives into how Tesla’s FSD works, how Tesla streamlines FSD, and, more recently, how they optimize FSD. If you want to get familiar with a bit of the lingo and the background knowledge, we recommend reading those articles before continuing, but we’ll do our best to explain how all this synthetic data works.
Nvidia Cosmos
Nvidia’s Cosmos is a generative AI model created to accelerate the development of physical AI systems, including robots and autonomous vehicles. Remember - Tesla’s FSD is also the same software that powers their humanoid robot, Optimus. Nvidia is aiming to tackle physical, real-world deployments of AI anywhere from your home, your street, or your workplace, just like Tesla.
Cosmos is a physics-aware engine that learns from real-world video and builds simulated video inputs. It tokenizes data to help AI systems learn quicker, all based on the video that is input into the system. Sound familiar? That’s exactly how FSD learns as well.
Cosmos also has the capability to do sensor-fused simulations. That means it can take multiple input sources - video, LiDAR, audio, or whatever else the user intends, and fuse them together into a single-world simulation for your AI model to learn from. This helps train, test, and validate autonomous vehicle behavior in a safe, synthetic format while also providing a massive breadth of data.
Data Scaling
Of course, Cosmos itself still requires video input - the more video you feed it, the more simulations it can generate and run. Data scaling is a necessity for AI applications, as you’ll need to feed it an infinite amount of data to build an infinite amount of scenarios for it to train itself on.
Synthetic data also has a problem - is it real? Can it predict real-world situations? In early 2024, Elon Musk commented on this problem, noting that data scales infinitely both in the real world and in simulated data. A better way to gather testing data is through real-world data. After all, no AI can predict the real world just yet - in fact, that’s an excellent quantum computing problem that the brightest minds are working on.
Yun-Ta Tsai, an engineer at Tesla’s AI team, also mentioned that writing code or generating scenarios doesn’t cover what even the wildest AI hallucinations might come up with. There are lots of optical phenomena and real-world situations that don’t necessarily make sense in the rigid training sets that AI would develop, so real-world data is absolutely essential to build a system that can actually train a useful real-world AI.
Tesla has billions of miles of real-world video that can be used for training, according to Tesla’s Social Media Team Lead Viv. This much data is essential because even today, FSD encounters “edge cases” that can confuse it, slow it down, or render it incapable of continuing, throwing up the dreaded red hands telling the user to take over.
Cosmos was trained on approximately 20 million hours of footage, including human activities like walking and manipulating objects. On the other hand, Tesla’s fleet gathers approximately 2,380 recorded minutes of real-world video per minute. Every 140 hours - just shy of 6 days - Tesla’s fleet gathers 20 million hours of footage. That was a little bit of back-of-the-napkin math, calculated at 60 mph as the average speed.
Generative Worlds
Both Tesla’s FSD and Nvidia’s Cosmos can generate highly realistic, physics-based worlds. These worlds are life-like environments and simulate the movement of people and traffic and the real-life position of obstacles and objects, including curbs, fences, buildings, and other objects.
Tesla uses a combination of real-world data and synthetic data, but the combination of data is heavily weighted to real-world data. Meanwhile, companies who use Cosmos will be weighting their data heavily towards synthetically created situations, drastically limiting what kind of cases they may see in their training datasets.
As such, while generative worlds may be useful to validate an AI quickly, we would argue that these worlds aren’t as useful as real-world data to do the training of an AI.
Overall, Cosmos is an exciting step - others are clearly following in Tesla’s footsteps, but they’re extremely far behind in real-world data. Tesla has built a massive first-mover advantage in AI and autonomy, and others are now playing catch-up.
We’re excited to see how Tesla’s future deployment of its Dojo Supercomputer for Data Labelling adds to its pre-existing lead, and how Cortex will be able to expand, as well as what competitors are going to be bringing to the table. After all, competition breeds innovation - and that’s how Tesla innovated in the EV space to begin with.
Last night, Tesla released software update 2024.45.25.15, which includes FSD V12.6.1. This update adds support for all HW3 vehicles, including the Model 3 and Model Y. We’re excited to see the continued support for HW3 owners.
FSD V12.6.1
V12.6.1 is now going wide, according to Ashok Elluswamy, Tesla’s VP of AI. This update is going to the Model 3 and Model Y for the first time - as only the Model S and Model X were included in FSD V12.6.
V12.6 is a big step forward for HW3 - it includes End-to-End on Highway, Improved City Streets Behavior, and Smoother and More Accurate Tracking - all contributing towards a better, smoother, and more comfortable build of FSD. You can read our comparison between FSD V12.6 and V13.2.2 here.
In short, FSD V12.6 performs considerably closer to V13 than V12.5.4.2 - which is a massive improvement. It performs as well as the Cybertruck version of FSD V13, which is still missing a few features when compared to other HW4 vehicles, but it’s a great sign for HW3. A lot of the improvements can be pointed to in the improvements to lane selection and decision-making - the vehicle tends to hesitate far less on V12.6, meaning the ride is a lot smoother. Many early V12.6 testers mentioned that it felt more like V13-mini than anything else.
Legacy Model S & X
We haven’t seen this update hit any legacy Model S and Model X vehicles just yet. We’re not sure whether Ashok’s statement of “generally” applies here - but it should. If you do get the update, please let us know.
Legacy Model S and Model X vehicles are still on an older FSD build and potentially won’t see another FSD update for a little while longer. While they do have the same FSD hardware as other vehicles, there are enough hardware differences that require a build specifically for these vehicles.
FSD V12.6.1 is going out now to the redesigned Model S and X with HW3 and all Model 3 and Model Y vehicles with HW3. The initial wave went out last night, and we expect to see more later today or tomorrow. If this release ends up going “wide,” we should see much larger waves go out next week.
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