A Tesla Inc TSLA stock analyst is putting pressure on the company's ability to solve autonomous driving after nearly crashing while experiencing full self-driving first hand.
The Tesla Analyst: Truist analyst William Stein reiterated a Hold rating on Tesla and a price target of $215 in a new investor note.
The Analyst Takeaways: Best known for its electric vehicles, Tesla has a goal of launching robotaxis and autonomous vehicles in the future, something Stein is skeptical about.
"Tesla may ‘solve' autonomy, but FSD v12.3.6 doesn't," Stein said.
The analyst tested an updated version of FSD on a Tesla Model Y believed to be v12.3.6 and had to intervene several times due to obstacles missed by the technology.
Stein recalls the Model Y going through an intersection as the car ahead was completing a right turn.
"My quick intervention was absolutely required to avoid an otherwise certain accident."
The analyst said additional interventions were needed based on convenience and the instruction of a police officer.
"Another intervention was required when a police officer used hand motions to signal to us to pull to the side of the road to allow a funeral procession to pass."
During the FSD test, the Tesla Model Y also switched lanes when there were solid white lines.
It wasn't all negative during the FSD test, as the analyst said they were impressed with how the Model Y "adapted to challenging disruptions" that included lane closures, traffic flows and potholes.
The testing came after Stein said Tesla CEO Elon Musk encouraged investors to test its FSD autonomous driving software to better understand the company's efforts.
Stein said the software is "stunningly good, but not useful today."
Looking ahead, Stein now wonders what Tesla will reveal at its robotaxi day in October.
Stein also argues that Tesla's stock price is based on a valuation of electric vehicles and other factors including FSD, Optimus, Dojo and more.
"We continue to argue that TSLA's AI efforts are meaningfully important to the stock – including at the current price."
The analyst said investors should spend time using and investigating the company's AI products.
"We remain hopeful and truly optimistic that improvements to FSD will lead to ever-safer and more useful autonomy features from Tesla over time."
TSLA Price Action: Tesla shares were up 5.6% to $232.10 on Monday versus a 52-week trading range of $138.80 to $278.98. Tesla stock is down 7% year-to-date in 2024.
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Image created using artificial intelligence via Midjourney.
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