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NVIDIA says Tesla raised the bar for self-driving tech, car makers must deliver
NVIDIA, a prominent and highly successful leader in computer chip design, says that Tesla has raised the bar in autonomous driving software, and other car makers will have to deliver similar performance if they want to compete in the long-term future of the auto industry, according to a recent NVIDIA company blog.
“It’s financially insane to buy anything other than a Tesla,” CEO Elon Musk stated during the company’s Autonomy Day event. He then compared the purchase of any other car as equivalent to buying a horse for one’s transportation purposes. NVIDIA, for its part, agrees with Musk and Tesla’s sentiments about the future of self-driving and the need for powerful computers to push its progress.
“Self-driving cars—which are key to new levels of safety, efficiency, and convenience—are the future of the industry. And they require massive amounts of computing performance… This is the way forward. Every other automaker will need to deliver this level of performance,” the chip maker wrote.
The type of autonomous driving technology Tesla is pushing is predicted to be the inevitable standard, and the company’s lead in the arena will likely increase even further as more of their vehicles take to the road. “By end of this quarter, about half a million Teslas will have full self-driving hardware (pending computer swap) & we will make another half million FSD cars by mid next year,” Musk tweeted, emphasizing this point and echoing what he’d explained the day prior.
Exactly. By end of this quarter, about half a million Teslas will have full self-driving hardware (pending computer swap) & we will make another half million FSD cars by mid next year.
— Elon Musk (@elonmusk) April 23, 2019
Tesla’s recent Autonomy Day presentation drew comparisons between the all-electric car maker’s Full Self-Driving (FSD) computer chip and those produced by NVIDIA, the only computer processing unit maker delivering performance in line with Tesla’s. NVIDIA currently has two self-driving chips in the works: the Xavier SoC (system on a chip) for assisted driving AutoPilot features, and the DRIVE AGX Pegasus computer for full self-driving. The comparisons in Tesla’s presentation were directed at the Xavier in a single-chip configuration.
The technical performance specifications required to run powerful artificial intelligence (AI) neural networks (NN) for autonomous driving require operations performed per second to be measured in the trillions – abbreviated as TOPS (tera operations per second). Tesla’s FSD computer chip can perform at a rate of 72 TOPS (x2 chips in the computer for 144 TOPS total), and the Xavier does 30 TOPS (mistakenly claimed to be 21 TOPS at Tesla’s event, per NVIDIA’s blog).
NVIDIA also expressed in the blog piece its opinion that the match between FSD and Xavier wasn’t quite an apples-to-apples comparison, given the purposes of the two chips. The chip designer prefers its DRIVE AGX Pegasus for the line-up, a computer intended for fully autonomous driving and capable of 320 TOPS. Tesla is assumingly aware of this product and obviously acknowledges the high level of technology developed by NVIDIA given that Hardware 2.5, the computer currently running Tesla’s Autopilot features, was made by the company.
A Tesla with driver features “deleted” under the Tesla Network. | Image: Tesla
There are additional specifications such as power consumption that further differentiate FSD from NVIDIA’s products with a more similar purpose to Tesla’s latest computer. Thus, a different product match may not have mattered towards the overall point being made in the presentation. Either way, a more important distinction between the two companies is the current status of their technologies.
Tesla’s chip was crowned as “objectively the best in the world” by Musk, and this looks to be true, given the fact that all Tesla Model S, 3, and X vehicles being produced now have the hardware installed and will add to the already accruing real world self-driving data the company’s cars provide. NVIDIA has partnered with other car manufacturers to develop its products, but they are not incorporated in production vehicles the way Tesla’s FSD has been yet.
The performance Tesla has achieved in its FSD computer is impressive, and that was and continues to be the point. “[Autonomy] is basically our entire expense structure,” Musk told an investor inquiring about where the California-based company was incurring the most cost. Tesla is hedging its fiscal future on the success of autonomous driving in the marketplace, and the company is doing so with bullish energy driven by its famous top executive.
Musk expects Tesla’s Full Self-Driving software to be complete by the end of this year and fully operational by the second quarter of next year.
Tesla shared a striking video showcasing the decommissioning of the original Model S and Model X assembly line at its Fremont Factory in Northern California. Completed in just 46 days, the teardown involved heavy machinery dismantling concrete pits, removing robotic arms and conveyors, and clearing the space for new production.
The post, captioned “End of an era,” captured both the end of a historic chapter and Tesla’s aggressive pivot toward its next major initiative, Optimus.
End of an era: Decommissioning the original Model S & X assembly line in just 46 days pic.twitter.com/kGEdfhl62h
— Tesla Manufacturing (@gigafactories) July 10, 2026
The decision to retire the Model S and Model X originated during Tesla’s Q4 2025 Earnings Call in late January 2026. CEO Elon Musk announced that production of the company’s flagship sedan and SUV would wind down by the end of Q2 2026, describing it as bringing the programs to an “honorable discharge.”
Custom orders ceased around early April 2026, with the final vehicles rolling off the line in early May. A special signature delivery ceremony on May 20 marked the emotional close for these vehicles, which had defined Tesla’s early success and luxury EV segment since the Model S launch in 2012.
The primary reason for tearing down the lines was to repurpose the valuable factory floor space for high-volume production of Tesla’s Optimus humanoid robot. Musk had indicated on Earnings Calls that the Fremont S/X line would be replaced by a dedicated Optimus manufacturing line targeting a capacity of one million units per year.
This move aligns with Tesla’s broader strategic shift from traditional vehicle manufacturing toward robotics and artificial intelligence, leveraging the company’s expertise in autonomy, AI training, and high-volume production.
Optimus, Tesla’s general-purpose humanoid robot, is designed to perform repetitive or dangerous tasks in factories, warehouses, and eventually homes. Powered by Tesla’s AI and Neural Networks, it aims to be a versatile, affordable platform. Production of Optimus Gen 3 is already underway in limited form at Fremont, with full-scale output on the converted line expected to begin in late July or August.
Tesla is targeting rapid scaling, with internal ambitions pointing toward tens or even hundreds of thousands of units annually by the end of 2026.
Longer-term, Tesla is constructing a much larger second-generation Optimus facility at Giga Texas, with potential capacity reaching millions of units per year. The company views Optimus as a transformative product that could eventually surpass its automotive business in scale and value, enabling widespread deployment of useful robots across industries. CEO Elon Musk has even predicted it would be the most popular product of all-time.
As one era closes at Fremont, another is rapidly taking shape.
Elon Musk posted a candid admission on his social media platform X on June 9, declaring that he had been “clearly wrong” about Anthropic. The statement marked a notable reversal from his earlier skepticism toward the AI company.
In September, Musk had written, “Winning was never in the set of possible outcomes for Anthropic,” reflecting his view at the time that the startup had lacked the foundation or even the trajectory to succeed in what is an incredibly intense race for advanced artificial intelligence.
Musk’s latest post came amid discussion of Anthropic’s reliance on external compute resources. He praised the company’s progress, stating that Anthropic is “obviously currently the leader in AI” and that “no company has released a model as good as Mythos/Fable,” with expectations of a strong follow-up in Mythos 2.
The tone shifted dramatically from dismissal to acknowledgement of superior performance.
I was clearly wrong about Anthropic. They are obviously currently the leader in AI. No company has released a model as good as Mythos/Fable and they will undoubtedly have Mythos 2 ready soon.
And I would never cut them off in a way that hurt them badly, even as a competitor.…
— Elon Musk (@elonmusk) July 9, 2026
The context of Musk’s comments added significance. Anthropic has been operating under a recent compute deal with SpaceXAI, Musk’s AI infrastructure-focused venture. The pair entered a short-term GPU lease agreement initiated in May, providing Anthropic access to critical computing power for training and deploying its frontier models.
SpaceXAI signs agreement with Anthropic for massive AI supercomputer access
Some observers had speculated that Musk could leverage this dependency to disadvantage a rival. Musk directly addressed the possibility, writing, “I would never cut them off in a way that hurt them badly, even as a competitor. That’s not my style.”
To support his commitment to ethical competition, Musk referenced concrete examples from his other companies. Tesla famously open-sourced its entire portfolio of electric vehicle patents in 2014. The move was designed to accelerate the global adoption of sustainable transportation technology rather than protect proprietary advantages.
Tesla also made its Supercharger network available to competing electric vehicle manufacturers, transforming what could have remained an exclusive charging ecosystem into a shared infrastructure that benefits the broader industry and reduces barriers for EV adoption.
Musk further pointed to SpaceX’s practices, noting that the company launches satellites for competing commercial systems “with no increase in price or use of unfair terms.” He extended the principle to his social platform, observing that “even my worst enemies attack me on this platform,” underscoring preference for open discourse over retaliation.
These examples have illustrated Musk’s long-standing philosophy that long-term technological progress is best served by open competition and infrastructure sharing rather than leveraging market power to stifle rivals. In the fast-evolving AI sector, where compute resources and model capabilities determine leadership, Musk’s stance suggests a willingness to compete on innovation and performance alone.
Musk’s admission arrives as SpaceXAI itself advances its own frontier models while maintaining business relationships across the ecosystem. By publicly correcting his earlier assessment and reaffirming principles of fair play, Musk highlights a model of competition that prioritizes advancement of the field over short-term tactical advantages.
A Tesla analyst believes the company’s Full Self-Driving suite is close to an “inflection point,” where people will finally realize that it is more than what it appears, similar to how many view the iPhone.
Pierre Ferragu, an analyst who has covered Tesla for many years at New Street Research, says the Full Self-Driving suite is one piece of evidence supporting the view that a Tesla is more than a car. He compared it to the iPhone and noted that the high price tag seemed like a lot for a phone early on. Then people realized the iPhone was more than just something you make calls with. It made their lives simpler.
🚨 Analyst @p_ferragu says Tesla Full Self-Driving is at an “inflection point” in a recent commentary:
“A Tesla is not a car, the same way an iPhone was not a phone. As a tool that gets you to work peacefully every morning, it is not expensive. Give us 2 more quarters to see… pic.twitter.com/tm6xFrjVPV
— TESLARATI (@Teslarati) July 10, 2026
Suddenly, that price tag was justified.
Tesla offers several models under the average transaction price for a new vehicle, which was above $49,000, according to Kelley Blue Book. However, that does not take into account that many people can still not afford a $35,000 vehicle. Ferragu offers his thoughts:
“Remember when the addressable market of the iPhone was 10 million units? Then people realized how good it was, and now, nearly 250m are sold every year.
A similar evolution for Tesla is still on the table. A Tesla is not a car, the same way an iPhone was not a phone.
A model 3 at $35k + $100 per month is too expensive for most, but only as a car, the same way a $600 iPhone was too expensive for most, until most realized it was much more than a phone.
As a tool that gets you to work peacefully every morning, it is not expensive.”
This point is valid, especially considering the iPhone’s impact on the cell phone market. There are still a handful of players, but most people you know have an iPhone. The iPhone ties into Apple’s other ecosystem of products.
This is how Tesla plans to infiltrate the automotive market, and once the company offers a fully autonomous suite, or something that can allow for unsupervised self-driving, more and more people will flock to Tesla.
Ferragu believes Tesla needs two additional quarters of development before things will truly change. He didn’t elaborate on what will happen in two quarters, but he said it will give us all time to “see where this is heading.”
It is really quite interesting to see people’s reactions when they find out what a Tesla is capable of. Full Self-Driving is a great tool for taking stress out of travel; I use it daily, and it has made it really difficult to consider taking any other car on a drive of practically any length.
To me, it is really hard to believe that people will not at least seriously consider a Tesla as their next car if they experience Full Self-Driving. This is a major point for those who argue that Tesla should advertise in some way.
Tesla shows rapid teardown of Model S and X lines, paving the way for Optimus at Fremont
Elon Musk admits he was ‘clearly wrong’ about Anthropic
