Tesla FSD Not Fully Autonomous, Investor Warns Amid China Push

Key Takeaway

• Tesla's FSD advancements in China, meeting data security requirements, have spiked investor interest despite skepticism about its autonomy level.
• Analyst ratings, like Cantor Fitzgerald's buy rating for Tesla, significantly influence stock performance and investor sentiment.
• Tesla partners with Baidu for HD maps in China to navigate stringent regulations, aiming to boost FSD subscriptions amidst local competition.

Tesla's FSD Progress in China

Tesla's advancements toward launching its Full Self-Driving (FSD) feature in China have sparked significant investor interest, with shares rising sharply after the electric car giant announced it had met the country's data security requirements. This development is seen as a crucial step toward the deployment of FSD in the Chinese market. However, Mark Hawtin of GAM Investment Management has expressed skepticism about the perceived breakthrough, noting that Tesla's FSD does not equate to full autonomous driving but rather an assisted-driving capability similar to what is already available in the U.S. and U.K. Despite the enthusiasm, Hawtin believes true autonomy from Tesla's FSD is still a decade away, emphasizing the intense competition Tesla faces in China from local tech giants and EV manufacturers.

Analyst Perspectives on Tesla and Market Movements

Cantor Fitzgerald recently initiated Tesla with a buy rating, optimistic about the company's full self-driving prospects. This bullish stance on Tesla's technological advancements and its potential market impact reflects a broader trend of analyst ratings significantly influencing stock performance. The market has shown sensitivity to such evaluations, as seen in Carvana's 50% surge following an upgrade by JPMorgan and the varied responses to upgrades and downgrades across the retail and technology sectors. These analyst calls highlight the critical role of future company prospects and technological innovations in shaping investor sentiment and stock valuations.

Strategic Partnership with Baidu

Tesla's partnership with Baidu for high-definition (HD) maps in China marks a strategic pivot for the company, aiming to facilitate the deployment of its FSD technology in compliance with local regulations. This collaboration is crucial for Tesla to navigate China's stringent data security and privacy laws, enabling the electric car maker to tap into Baidu's extensive mapping capabilities and regulatory expertise. The partnership is anticipated to boost Tesla's revenue potential in China through FSD subscriptions, with around 1.6 million Tesla vehicles on Chinese roads. However, Tesla faces challenges from local EV manufacturers and a complex regulatory landscape that could impact its long-term success in the Chinese market.

Street Views

• Mark Hawtin, GAM Investment Management (Neutral on Tesla):

  "We should say what they’re doing — everyone’s talking about this full self-driving capability. What they’re going to be able to do in China is what they already do in the U.S. or U.K., which is sort of this assisted-driver capability." "It’s by no means autonomous driving yet... a version of Tesla FSD capable of 'true autonomy' is still five to 10 years away."