Tesla says it has an industry-leading advanced driver assistance system, and investors believe the monetary opportunity with FSD and Autopilot could be in the trillions.
Even though Tesla currently derives 90% of its revenue and 94% of its gross margin from auto sales, permabulls like Ark Invest CEO Cathie Wood and Wedbush analyst Dan Ives believe the company’s true value lies in its ancillary businesses, like ADAS.
Tesla compensation performance benchmarks for CEO Elon Musk
- 20 million Tesla vehicles delivered
- 10 million active FSD subscriptions
- 1 million Optimus robots delivered
- 1 million Robotaxis in commercial operation
- $400 billion of Adjusted EBITDA over four separate quarters
“Our target in five years is $2,600, and our confidence in that number has gone up now that Tesla is commercializing Robotaxis,” Wood said.
Tesla shares are trading in the $421 range, so Wood thinks Robotaxis could multiply the company’s trillion-dollar valuation by 6x.
William Blair analyst Jed Dorsheimer has a more sober view of the company, with a “market perform” rating. But even he believes Robotaxi is the key to the company’s future.
“What jumps out to me is that Robotaxi is really the key here, as well as xAI,” William Blair analyst Jed Dorsheimer told CNBC recently. Robotaxi accounts for $298.61 of the firm’s $357.43 price target.
Tesla shares fell nearly 3% Oct. 10 after the U.S. National Highway Traffic Administration opened a probe into the company’s future golden goose.
Image source: Somodevilla/Getty Images
NHTSA opens probe into Tesla FSD system after series of crashes
Tesla is already popular at the NHTSA. The electric vehicle maker had ranked third in open NHTSA investigations, with four. Ford and Honda were ahead of it with eight and five, respectively.
This week, the NHTSA opened another investigation, and now the company is tied for second.
This time, the investigation is into 2.88 million Teslas equipped with Full Self-Driving, following more than 50 reports of traffic-safety violations and a series of crashes.
Related: Tesla Model Y issue put children in danger, leading to new NHTSA probe
The agency says its investigation will focus on “whether certain driving inputs within the control authority of FSD forestall the driver’s supervision when they are unexpectedly performed.”
Even though Tesla says FSD requires drivers to pay attention and intervene when necessary, the NHTSA says it has received reports that the technology has “induced vehicle behavior that violated traffic safety laws.”
Those reports fall into two categories, according to the agency.
The first…scenario involves a vehicle …proceeding into an intersection in violation of a red traffic signal. The second…involves FSD commanding a lane change into an opposing lane of traffic.
National Highway Traffic Administration open investigation
NHTSA is investigating two types of dangerous Tesla FSD traffic violations
The agency has received 18 reports and seen one media report alleging that a Tesla, operating at an intersection with FSD engaged, failed to remain stopped at the red light for the duration of the traffic signal, failed to stop fully, or failed to accurately detect and display the correct traffic signal state in the vehicle interface.
The NHTSA Office of Defects Investigation also identified six crash reports in which an FSD-engaged Tesla ran through a red light. Four of those accidents resulted in one or more reported injuries.
Related: Tesla driver shares FSD safety flaw in a concerning video on X
The ODI has also identified two Standing General Order crash reports, 18 complaints, and two media reports alleging an FSD-engaged Tesla swerved into the opposing travel lanes during or following a turn, or attempted to turn onto a road in the wrong direction, despite the presence of wrong-way road signs.
It is also investigating reports alleging that an FSD-engaged Tesla “executed a turn at an intersection in a through lane despite the presence of lane markings or signals.”
Perhaps most concerning, complaints also allege that FSD did not provide warnings of the system’s intended behavior before making some of these mistakes.
The NHTSA has a complicated history with Tesla CEO Elon Musk
Last month, the U.S. Senate voted 51-47 to confirm Jonathan Morrison to lead the NHTSA.
Earlier this year, Tesla CEO Elon Musk caused quite a stir after the Department of Government Efficiency, at his direction, fired about 30 members of the NHTSA.
According to reports, many of those workers were tasked with assessing the risk of self-driving cars, which is where Tesla is betting most of its future value lies.
One worker said at the time that the firings could “weaken NHTSA’s ability to understand self-driving technologies.”
Since then, Elon Musk has been legally forced to leave his position at DOGE, and the agency has opened multiple investigations into the company.
Since October, the NHTSA has investigated Tesla’s full self-driving collisions in reduced roadway visibility situations. That investigation is centered on the software’s ability to detect and respond to reduced visibility situations involving fog, sun glare, and airborne dust.
The review was prompted by four crashes involving Teslas driven by FSD, including one that involved a fatality.
Tesla then failed to answer a detailed questionnaire about FSD that the NHTSA sent to it by a June 19 deadline. The agency didn’t receive a response until days after the deadline.
In January, the NHTSA opened an investigation into 2.6 million Tesla vehicles over reports of crashes involving a feature that allows users to move their cars remotely.
In August, it was reported that the Office of Defects Investigations was investigating “numerous incident reports submitted by Tesla in response to Standing General Order 2021-01, in which the reported crashes occurred several months or more before the dates of the reports.”
In September, the NHTSA announced that it is in the second phase of its three-step process to issue a recall on the popular Tesla Model Y over an electrical issue that could cause the door handle to fail.
More Tesla:
- Tesla lands in more hot water over Elon Musk’s Full Self Driving claims
- Tesla’s history of settling Autopilot claims before $243 million lawsuit
- Tesla faces another lawsuit after $323 million autopilot verdict
The government agency is investigating after receiving reports of parents being unable to open the doors of their vehicles with children trapped in the car.
The door handle has remained the same since 2018, but last month, Tesla’s longtime design chief, Franz von Holzhausen, told Bloomberg News (subscription) that the company is considering combining its electronic and manual door-release mechanisms to fix the issue.
Related: Tesla enthusiasts take Elon Musk’s cross-country FSD challenge
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