Morgan Stanley's Key Thoughts On Tesla's Autopilot

Adam Jonas of Morgan Stanley commented on Tesla Motors Inc TSLA's autopilot feature and the surrounding controversy involving the death of a Model S owner. According to Jonas, it is only natural that the number of fatalities linked to a Tesla vehicle rises with the size of Tesla's fleet. The company produced 122,000 Model S and X vehicles since 2012 and using available statistics on car related fatalities implies a Tesla vehicle would be linked to a fatality every 28 days. Jonas added that even when factoring in Tesla's superior safety records, it is expected there will be a "handful of fatal crashes each year." On the other hand, Jonas suggested that Tesla's use of the term autopilot "could create a consumer expectation problem" along with a "potential more hazard." The analyst added that Tesla's autopilot, contrary to its name, is merely a driver assist tool. Unfortunately, many Tesla owners are likely to be tempted to "explore the novelty factor of the system in ways that expose themselves, fellow passengers and other vehicles on public roads to greater danger." Nevertheless, Jonas believes that automated driving is "real" and "coming soon" with "significant" safety benefits over the next 2 to 3 years. Tesla, he added, is "uniquely positioned" to accelerate innovation in the field and eventually achieve "order-of-magnitude improvements in vehicle safety." Jonas maintained an Equal-weight rating on Tesla's stock with an unchanged $245 price target.