Benzinga - by Shanthi Rexaline, Benzinga Editor.
Even as the efficacy and safety of Tesla, Inc.’s (NASDAQ:TSLA) full-self driving software suite polarizes people, an analyst reposed confidence in the technology in a new note released Sunday.
Autonomy Well On Its Way: “We for our part – are autonomy uber-bulls. Unabashed and unrelenting,” said CANACCORD Genuity analyst George Gianarikas, excerpts of the note shared on X by Tesla influencer Sawyer Merritt showed.
“We believe AVs [autonomous vehicles] are set to increase resource utilization, improve productivity, save lives, and much more. We see vehicle autonomy as one of the highest value-creating technologies to be deployed ever,” the analyst said.
Full autonomy, according to the analyst, not only has the potential to improve resource utilization but also “enhance human productivity, decongest highways, downsize vehicle fleets, provide transport to billions of underserved, and save lives.”
Despite failed promises and the pushbacks such as the need to further perfect the technology, make it cheaper and the regulatory bottlenecks, “autonomy is well on its way” but it’s all happening slowly, the analyst said.
Tesla – The Frontrunner: Tesla will be a leader in autonomy despite some extended deployment timetables, Gianarikas said. The Elon Musk-led company has taken a “different controversial technology” approach, he said, adding that the market has room for multiple solutions.
The analyst noted that Tesla uses the “camera-only, neural-network” approach, Mobileye uses machine learning, large language model components connected by traditional software crowd and Aurora uses a hybrid approach, similar to Mobileye’s but with the heavy use of simulated miles.
“We currently see Tesla and Mobileye as winners in the passenger AV market,” Gianarikas said. Many independent OEM efforts will wind down over time for reasons including lack of scale, leaving room for Mobileye to gain traction as a merchant vendor to multiple OEMs, he added.
The analyst said Tesla’s system will be well-functioning and likely be used exclusively for its own vehicle fleet for some time. Aurora will likely be dominant in US autonomous trucking, he said.
Commenting on the Model 2 rumors and Tesla management’s response, the CANACCORD analyst said It could be that the company has accelerated the development of its full Robotaxi based on confidence in FSD. Alternatively, it could also suggest that low-cost Chinese EVs have led Tesla to believe its true competitive advantage will be based more on a combination of cost and autonomy rather than cost alone, he said.
“Tesla is increasingly a bet on autonomy,” the analyst said, adding “for a true breakthrough in margins above historical levels, and for the story to significantly and sustainably outperform based on sizable upside earnings revisions- we need the razor/razorblade model to ignite.”
The analyst called for the need for a trajectory change in FSD, either through product improvements and/or price cuts. He noted that FSD is getting better all the time, at an accelerating pace. “So maybe we are close,” he said.
“Take it or leave it, a bet on Tesla is a bet on an autonomous future. We'll take it.”
Price Action: In premarket trading on Monday, Tesla shares rallied 3.81% to $171.18, according to Benzinga Pro data.
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