Tesla shares rise on FSD roadmap plans with robotaxi launch in focus

Shares of Tesla rose in early trading Thursday after the automaker said it is ready to launch its driver-assistance technologies early next year, as it prepares for the launch of its Cybercab robot taxi next month in California.

As part of a “roadmap” update for investors posted on Elon Musk’s X social media site, Tesla said its advanced Full Self-Driving (FSD) driver assistance software will be available in Europe and China next year, pending final regulatory approval.

Movement comes like Tesla (TSLA) continues to shift its focus away from its traditional EV manufacturing roots and towards cutting-edge products such as robotaxis that are powered by the group’s AI technologies.

Musk himself has touted the profit potential of AI technologies, particularly in relation to the group’s ambition to provide self-driving software to its global fleet of nearly 7 million electric vehicles, adding that capital spending is likely to rise to around 10 billion dollars this year.

“We’re going to double down on Dojo and see a way to be competitive with Nvidia with Dojo,” Musk told investors in July. “We need to make the Dojo work and we will.”

“Anyone who doesn’t believe that Tesla would solve vehicle autonomy should not own Tesla stock,” Musk said. “They should sell their Tesla shares.”

Reports suggest Tesla will unveil its long-delayed Cybercab at a gala event next month in Los Angeles.

Tesla’s ability to prove that ambition will take a big step forward next month when it unveils its first robotaxi, called the Cybercab, at an event that will reportedly take place at a Warner Bros. Discovery. (WBD) studio in Los Angeles.

Robotaxi reveals in focus

Musk said the robotaxi event, originally scheduled for early August, was delayed to “make some important changes that I think would improve the vehicle,” adding that he would be “shocked” if the first unsupervised trips could not take place by the end of next year.

“Next year looks very likely to me based on simply plus the mileage curve points between interventions,” Musk told investors in July.

Wedbush analyst Dan Ives, a longtime bull, said Tesla is “the most undervalued AI play in the market” and that the group’s autonomous and full-self-driving platforms are “ultimately the key to achieving a valuations in excess of $1 trillion”.

Related: Analyst revises Tesla stock price target with eye on key value driver

Safety issues have continued to plague FSD releases, however, with the technology linked to at least two fatal crashes in the past two years, including the death of a motorcyclist struck by a Model S sedan in Seattle earlier this summer.

Musk told Tesla employees earlier this year that it would be “mandatory” for its North American operations to “install and enable” full self-driving software in new Tesla vehicles and “drive customers into a short test drive before handing over the car. .”

“Almost nobody actually realizes how well FSD (supervised) works,” Musk wrote in the note. “I know this will slow down the delivery process, but it’s still a tall order.”

FSD key to increase margin

Tesla claimed to have data based on about 300 million miles of driving, a figure Musk said “would soon be billions of miles and tens of billions of miles.”

This would provide a huge competitive advantage for the company as it increases investment in AI and other technologies to realize its potential.

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The impact on profit margins could also be notable given the $12,000 additional cost to the average Tesla’s $45,000 selling price. Musk also said Tesla is in talks to license the technology to a “major” OEM and is “very open to licensing our Full-Self-Driving software and hardware to other car companies.”

Related: Top Analyst Defends Tesla Share Price Target Despite Earnings Decline

Gene Munster, an analyst at Deepwater Asset Management and a longtime Tesla bull, said the licensing of FSD technology could generate up to $20 billion in annual revenue within five years of the first deal.

Due to popular demand, the Tesla AI team has released the roadmap:

September 2024
– v12.5.2 with ~3x improved miles between required interventions
– v12.5.2 on AI3 PC (unified models for AI3 and AI4)
– Actually, Smart Summon
– Cybertruck Autopark 📐
– Eye-tracking with sunglasses 🕶️
-…

— Tesla AI (@Tesla_AI) September 5, 2024

Tesla shares were marked 2.6 percent higher in premarket trading to indicate an opening price of $225.12 each, a move that would extend the stock’s three-month gain to about 28.6 percent.

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