Summary
– RBC Capital analyst recognizes significance of Tesla’s Full Self Driving (FSD) efforts
– Analyst reiterates “Outperform” rating for TSLA stock with $293 price target
– FSD could become mandated by regulators and benefit consumers, increasing Tesla’s potential as a provider
– Tesla FSD has passed 1.3 billion cumulative miles, closer to Musk’s goal of 6 billion for regulatory approval
– Analyst views winning FSD in China as significant and could lead to charging subscription fees, increasing market share
Article
Analysts are beginning to acknowledge the importance of Tesla’s Full Self Driving (FSD) efforts, especially in China. RBC Capital analyst Tom Narayan noted that FSD in China could be significant for the company’s future. He also reiterated an “Outperform” rating for TSLA stock with a price target of $293 per share. Narayan covers the Consumer Cyclical sector and focuses on stocks like Tesla, Ferrari, and the Mercedes-Benz Group, with a success rate of 54.50% on his recommended stocks.
The RBC analyst echoed CEO Elon Musk’s points about FSD, suggesting that regulators may eventually mandate such systems as life-saving tools. As these systems are recognized for their benefits to consumers, Tesla could potentially become a major provider of FSD. This could lead to a significant increase in Tesla’s fleet of vehicles and the ability to charge subscription fees. Additionally, Tesla’s FSD is reported to be 5 times safer than the US fleet according to accident data provided by the company, potentially paving the way for regulatory mandates on Level 2+ offerings.
Tesla has reported that FSD users have collectively driven over 1.3 billion miles, a significant milestone in the journey towards achieving worldwide regulatory approval for autonomous vehicles. Musk’s Master Plan Part Deux from 2016 estimated that 6 billion cumulative miles would be necessary for regulatory approval, a goal that could be attainable if Tesla successfully implements FSD in China and sees increased customer adoption of the service. The data collected from autopilot interactions and algorithm training in the US could potentially prevent software piracy by Chinese companies.
Overall, RBC Capital’s endorsement of Tesla’s FSD potential in China highlights the significance of this technology for the company’s future growth. With the potential to become an industry standard for software and potentially license its FSD technology to other OEMs, Tesla is positioning itself as a leader in the autonomous driving space. The successful rollout of FSD in China could not only strengthen Tesla’s market share but also contribute to the wider acceptance of autonomous vehicles globally.
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