A Tesla Inc TSLA analyst continues to put CEO Elon Musk's call for investors to test FSD to the test and shares how a third test of the technology performed and what it could mean for the future of autonomous vehicles.
The Tesla Analyst: Truist analyst William Stein maintained a Hold rating on Tesla with a $215 price target.
The Analyst Takeaways: Stein tested FSD V12.5.1.1 in a new Tesla Model 3 with a similar setup to his first two tests of the Tesla technology.
The analyst said the weather conditions were clear and dry. One notable difference in the third test was a Tesla representative required the analyst and his 16-year-old son to sit through an on-road FSD demonstration before they got on the road alone.
Due to others waiting to test drive the Model 3 and a 20-minute time limit, the third test also featured a closer destination than the past two tests from the analyst.
"I feared the more straightforward route would be much easier for FSD to navigate — offering a sort of ‘half test' that would be unremarkable. I was wrong," Stein said.
The analyst said the vehicle made a left turn from a "second-from-left" non-turn lane through a red light, breaking two driving rules in one move. The vehicle also drove in the middle of two lanes on a twisty part of Bronx River Parkway, prompting driver intervention.
Stein said the test showed "more human-like behavior" and had path planning and execution that worked.
"Acceleration, deceleration, lane changes and lane positioning felt more smooth and human-like, less herky-jerky and artificial, than prior versions."
Stein said the two illegal moves prove that FSD v12.5 does not "solve autonomy" or get close to robotaxi capabilities Tesla is working on.
"In fact, my 16-year-old son came away ‘terrified.' I wasn't so sure."
Stein said the "third time was not the charm" with the test of the Model 3.
After the test, Stein questioned what Tesla would introduce at its robotaxi event in October.
"We continue to argue that TSLA's AI efforts are significant to the stock — including at the current price."
The analyst said Tesla's automotive sales, energy capture and energy storage represent a value of $75 per share with other services making up the rest including $55 per share for FSD.
"The AI projects are significant to the stock. So, we argue investors should spend some time investigating whether TSLA's AI project with the most history, that's generating current revenue, and is being used in the real world already, actually works."
TSLA Price Action: Tesla shares are down 2.73% to $202.17 on Wednesday versus a 52-week trading range of $138.80 to $278.98. Tesla stock is down 19% year-to-date in 2024.
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Photo: Tesla Model 3 courtesy Tesla Inc.
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