Investment bank Morgan Stanley analyst Andrew Percoco believes Tesla Inc.‘s (NASDAQ:TSLA) launch of its Robotaxi service in Houston and Dallas is a sign of progress for the automaker’s self-driving vision.
Tangible Progress
In an investor note released on Sunday, Percoco said that the rollout represented “tangible progress at a time when the market was growing increasingly skeptical about Tesla’s robotaxi expansion timeline.” The analyst also shared that the move was a “material evolution” from Austin’s launch last year, with human safety drivers for several months before it became unsupervised.
“We believe a successful robotaxi rollout has the potential to create a powerful flywheel across Tesla’s ecosystem,” Percoco said in the note, believing the rollout would help expedite the development of unsupervised Full Self-Driving (FSD) technology.
Speaking on Tesla’s capex figures of nearly $8.5 billion, Percoco said that the advancements in FSD were “a key lever to re-invigorate auto sales and margins to fund Tesla’s longer-term ambitions in physical AI.” There was no change in his price target of $415 for the automaker.
Ross Gerber Weighs In
Following the launch, investor Ross Gerber of Gerber Kawasaki also weighed in on the event, remaining skeptical of the service’s rollout. “Tesla trying to distract from the lack of earnings they will soon report,” Gerber said. He added that the automaker was continuing to “kick the can down the road” without expanding on it further.
Tesla’s AI5 Chip
Elon Musk recently took to social media to showcase Tesla’s AI5 chip, which is a crucial element of the automaker’s self-driving plans. The automaker also released the FSD v14.3, promising improvements to the self-driving suite. Its release prompted Gerber to share that customers of the EV giant deserved a $10,000 refund if the v14.3 update did not enable Unsupervised FSD.
Tesla’s Lawsuit Woes
Amidst the rollout, a report by Electrek recently said that the EV giant’s legal troubles could reportedly cost it billions of dollars in settlements and other costs. The automaker is currently facing over 21 active lawsuits, comprising wrongful death lawsuits, as well as customers suing the EV giant over its self-driving and driver assistance systems.
According to Benzinga Edge Rankings, Tesla offers satisfactory Momentum, but poor Value. It provides a favorable price trend in the Long term.
Price Action: TSLA surged 3.01% to $400.62 at market close on Friday, climbing 0.12% further to $401.09 during the after-hours trading session.
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