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Among the leading U.S.-based EV company investors watch closely, Tesla ( NASDAQ:TSLA ) continues to dominate the mind share of most investors in the market. Whether it's the company's leading position in the U.S. as a top-selling EV maker, the company's global ambitions to continue to drive its global market share, or the company's "other bets" in AI, robotics and autonomous driving, there are plenty of reasons why many investors are highly bullish on this EV maker, particularly at current levels.
This article will be focused on Tesla's so-called "Full Self Driving" (FSD) self-driving technology. While Tesla hasn't yet received full regulatory approval to operate its FSD technology as a robotaxi service ( and other competitors have ), it's also true that the company is making a big push to do so, and has provided the market with some updates on where Tesla expects to launch its FSD software in the future, and its potential prospects for regulatory approval in core markets.
Let's dive into where Tesla stands in terms of potentially dominating the autonomous vehicle market long-term, and how its FSD platform could play into this thesis.
Key Points About This Article:
- Tesla remains among the most dominant global EV players in the market, and has been expanding its focus on its other non-core businesses in recent years.
- Aside from AI and robotics, Tesla's "Full Self Driving" technology is going to be key to its long-term growth thesis - here are a couple key announcements to watch on this front.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report . It features a software stock we’re confident has 10X potential.
Update on Tesla's "Full Self Driving" (FSD) Platform
A Tesla "Full Self Driving" (FSD) chip
Tesla's upcoming robotaxi event on October 10 in L.A. is expected to be among the most pivotal company events in some time. The company is expected to tout its latest AI-driven advancements for its self-driving technology, recently investing in a massive supercomputer cluster of 100,000 Nvidia GPUs being built out in Texas. The company is also allocation an additional $500 million to its Dojo supercomputer project tin buffalo, NY. These investments are aimed at further growing the company's FSD and Autopilot technologies.
One of the key recent announcements that's likely to be discussed further in this event is the likelihood that FSD will launch in China by early 2025 , with a European release, as well as a right-hand drive (RHD) markets release between late Q1 and early Q2 of 2025.
Tesla's FSD launch in the right-hand drive (RHD) market will expand availability to drivers in the UK, Ireland, Australia, New Zealand, Japan, Hong Kong, and Singapore. This move is a crucial step toward a global rollout. Significant updates are anticipated before the system's launch in China, Europe, and RHD markets. Tesla plans to release FSD v12.5.2 for AI3 and AI4 vehicles this month, with FSD v13 expected in October, promising a sixfold increase in distance before requiring driver intervention.
What This Announcement Means for Tesla Shareholders
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Tesla’s advancements in autonomous driving and robotics will certainly be closely watched by the market. But following news that these are the key talking points the EV maker is expected to discuss, TSLA stock has begun to tick higher ahead of these rollout announcements.
Now, we're still around a month away from this robotaxi release, with the date already being pushed out one time thus far. Accordingly, until we hit this release date, there's reason for uncertainty investors will likely take into consideration. After all, we really have no idea how the company's robotaxi design may differ from its existing lineup of vehicles and software, and I think it will take a lot to shock the market and send TSLA stock materially higher.
That said, analysts just as Adam Jonas of Morgan Stanley remain bullish on Tesla heading into this event, reaffirming Tesla as his top U.S. automotive pick with a Buy rating and a $310 price target. So long as this European and Chinese FSD launch pay off as expected, it's possible the company's margins could accelerate higher, offsetting some of the recent declines seen due to price cutting activity, which has been centered in China.
Moreover, Tesla announced update s to its Full Self Driving (FSD) features, including improvements in parking and reversing. Cybertruck drivers will get FSD this month, with an updated version rolling out to other Tesla owners in October. The latest FSD version will cost $99 per month and will move existing drivers from version 12.3 to the more current 12.5 version.
So, Is TSLA Stock a Buy?
A Tesla showroom
Tesla’s FSD tech is certainly key to the bull thesis behind why this is a stock to own. Many view Tesla as more than an EV maker. It's a software/AI/robotics company with margin and growth potential closer to an AI or robotics stock relative to an automaker like Ford, or GM, for example.
That may be true during this stage of the company's development. However, I'm uncertain as to whether Tesla can really be the market leader in both EV production as well as software development, given the increasing competition in the robotaxi market, with other companies already well on their way to dominating markets where regulators have shown an affinity for these new technologies. Over time, I expect the company's gross and net margins to look at lot more like Ford's than Nvidia's.
In a sense, I'm saying I think Tesla is behind on a relative basis to existing competitors in the robotaxi market, and my view is that if the stock flies on its October 10 unveiling, this would be a stock I'd look at shorting on such a surge.
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