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Alphabet Inc.‘s (NASDAQ:GOOG), (NASDAQ:GOOGL) subsidiary Waymo has set the standard for Tesla Inc. (NASDAQ:TSLA) to gain approval for its robotaxi service, according to a leading Tesla bull.
What Happened: Gary Black, the Managing Partner at Future Fund, took to X to share his thoughts on the approval criteria for Tesla’s robotaxi service.
Black emphasized that Waymo has obtained approval to offer robotaxi rides for a fee in multiple cities. He argues that for Tesla to obtain similar approval, it must demonstrate efficacy—specifically, achieving 1 intervention per 17,000 miles—as good as Waymo’s and be willing to assume liability for any damage or injury. “If not, TSLA won't be granted robotaxi licenses to offer rides,” Black stated.
Black referenced a post by James Cat, known for Tesla commentary, who expressed skepticism about Tesla’s Full Self-Driving technology. Cat highlighted that Waymo had an intervention rate of 1 per 17,000 miles in 2023, while Tesla’s FSD currently requires a safety-critical intervention every 250-500 miles.
Cat noted that while Tesla’s FSD is an excellent driver assistance software, its rate of improvement is crucial. He mentioned being impressed by the progress from version 11 to version 12.3 in March but emphasized that data, not unveilings, is what truly matters.
Black’s comments come at a time when Tesla’s robotaxi plans have been delayed. The company’s CEO, Elon Musk, had initially scheduled the robotaxi unveiling for Aug. 8 but later pushed it to October.
Why It Matters: The delay has sparked a heated debate among analysts. Ross Gerber, CEO of Gerber Kawasaki Wealth, criticized Tesla for its “broken promises.” At the same time, Dan Ives of Wedbush Securities argued that a two-month delay does not significantly impact the bullish AI thesis for Tesla.
Additionally, Tesla’s stock has been under scrutiny. Ed Egilinsky, managing director at Direxion, highlighted concerns about Tesla’s valuation amid a slowdown in growth, questioning whether the current premium can be justified.
Despite the recent challenges, Tesla has been the subject of speculation about its potential to regain its standing among the Magnificent Seven stocks in the second half of 2024.
Price Action: Tesla Inc.'s stock closed at $241.03, down 8.44% on Thursday. In after-hours trading, the stock dipped a further 1.78%. Year to date, Tesla's stock is down 2.97%, according to data from Benzinga Pro.
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Image Generated With AI Via Midjourney
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
