Tesla Faces Challenges in Autonomous Vehicle Market

Investing.com — Tesla (NASDAQ:TSLA) will find it challenging to overtake competitors such as Waymo in the autonomous vehicle (AV) market, according to Bernstein analysts, who are typically critical of Tesla.

While the electric vehicle (EV) giant has been aggressively pursuing full self-driving (FSD) capabilities, analysts note that Waymo has been conducting trials for over a decade. Bernstein remarks:

> "We continue to believe that it will be difficult both technically and regulatively for Tesla to leapfrog Waymo, which has been conducting self-driving trials in CA for more than 10 years."

Elon Musk, Tesla's founder, has made optimistic claims about achieving full autonomy since 2017, but analysts see little progress. Despite Tesla's bullish statements regarding its FSD technology, the Bernstein team remains skeptical about overcoming the technological and regulatory hurdles to surpass current level 4 (L4) robotaxis.

The analysts forecast that fully unsupervised FSD is still years away and highlight that Musk has historically been overly optimistic about FSD timelines. Additionally, Tesla has yet to provide concrete performance metrics for any of its FSD versions.

> “Based on crowd-sourced data, Tesla continues to lag well behind competitors.”

The analysts express skepticism that Tesla can leapfrog current L4 robotaxi operators. While the firm believes Tesla could gain a cost advantage if it achieves parity with current AV leaders, this advantage may be short-lived as competitors are likely to catch up quickly and diminish any excessive profits for Tesla.

As for Tesla's humanoid robot, Optimus, the analysts consider widespread commercial use a distant prospect. They argue that for Optimus to succeed, it must provide high utility at a low price, akin to products like the Apple (NASDAQ:AAPL) Vision Pro.

Moreover, industrial applications are expected to face significant competition from more specialized robots.