Billionaire investor Warren Buffett has recently voiced concerns about Tesla’s Full Self-Driving (FSD) technology regarding its effect on the prospects of Berkshire Hathaway’s auto insurance business during the company’s annual shareholder meeting. 

Buffett was questioned during the meeting about the potential impact of Tesla’s FSD program on auto insurance rates and GEICO’s revenues, float, and margins. As a response, Buffett expressed skepticism about Tesla’s insurance ambitions, citing the complexities and competitiveness of the market stating, “The success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business.”

However, Buffett acknowledged the societal benefits that if accident rates decrease due to FSD technology, insurance prices would likely follow suit. He also acknowledged the value of data collected reflecting on the driving behavior of actual users in EVs but stated that telematics is a common approach to data collecting and does not believe it would give any advantage to automotive companies over established insurers. 

In response to Buffett’s comments, Tesla CEO Elon Musk had suggested Buffett to Tesla stock, referring to Buffetts recent offloading of 115 million shares of Apple stock. Furthermore, Musk posted on his X account stating, “He should take a position in Tesla. It’s an obvious move.”

In terms of Musk’s suggestion to Buffett on buying Tesla stock, the probability of that happening is unlikely due to Buffett’s take on the subject. Although, it is important to note that Buffett had invested in BYD, showing disinterest on Tesla and investing in its rival instead. However, Buffett has cut down his BYD stocks in the past couple of years with $25.8 million worth of shares sold back in October last year.

Musk previously stated its massive $10 billion investment on its FSD program for 2024, showing a commitment to expanding its capabilities through training the AI system in the FSD program. Moreover, Musk also showed an deeper commitment regarding the FSD program’s reach on a global scale especially with its tentative approval in China.

Despite Musk and Buffett portraying different opinions, the landscape of autonomous driving in the EV industry will encounter big forthcoming changes as other automotive companies not including Tesla are also aiming to expand its capabilities to further elevate the EV landscape. Yet, Tesla will be making more headlines as Musk continues to make moves for the success of its FSD program.

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