With dwindling EV sales amongst waning demand and growing competition, Tesla (NASDAQ:TSLA) is pinning its hopes on its self-driving and RoboTaxi endeavors. However, it seems Tesla will need to up its game if it truly wants to dominate the autonomous driving space.
That, in any case, is the conclusion reached by Truist’s William Stein, an analyst ranked in 8th spot amongst the thousands of Wall Street stock pros. After trying out previous iterations of its FSD (full self-driving) software, Stein gave the latest version a go and came away unimpressed.
“Our initial review of FSD v12 noted that the technology is stunningly good, but not useful today,” explained the 5-star analyst. “Our follow-up review of FSD v12.3.6 noted that it does not ‘solve’ autonomy, as Musk claimed. Our more brief review of FSD v12.5 was a ‘fast fail’. The shortcomings that we observed make it ever more challenging to imagine what TSLA will reveal in its RoboTaxi event in October.”
While Stein finds big faults after taking a new Model 3 with FSD V12.5.1.1 for a ride, it wasn’t all bad. The latest FSD’s behavior was “less artificial” and “more human-like,” while path planning and execution succeeded. Additionally, acceleration, deceleration, lane changes, and lane positioning were smoother and more realistic compared to earlier versions.
However, those positives can’t mask two “fast fails.” Stein was worried that the shorter duration and simpler route would make for an easy, incomplete test for the “much-praised” FSD v12.5. “I was wrong,” says the analyst bluntly. In a less than 10-mile drive, FSD made a left turn from a second-from-left (non-turn) lane, going through a red light. While this was a “fast fail” and a clear violation of two major driving rules, the smoothness of the maneuver and lack of traffic made it “somehow reasonably safe,” so Stein did not step in. However, a moment later on a twisty section of the Bronx River Parkway, FSD placed the car between two lanes – representing another “fast fail”. “This time,” says Stain, “I intervened.”
The conclusion is that FSD v12.5 neither “solves autonomy” nor seems close to achieving RoboTaxi capabilities. “We remain befuddled as to what TSLA might introduce in its planned RoboTaxi event in October,” Stein summed up.
All told, Stein remains on the sidelines with a Hold (i.e., Neutral) rating while his $201.38 price target implies Tesla shares will gain 7% over the next year. (To watch Stein’s track record, click here)
Most other analysts also remain on the TSLA fence for now. Based on 14 Hold recommendations, 10 Buys and 7 Sells, the stock claims a Hold consensus rating. Meanwhile, the $211.46 average target factors in one-year returns of 5%. (See Tesla stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
