Tesla’s FSD Still Not Ready for Prime Time: Analyst’s Third Test Raises Concerns
Tesla Inc TSLA continues to be a hot topic in the world of autonomous vehicles, and its Full Self-Driving (FSD) beta program remains under scrutiny. Truist analyst William Stein, known for his pragmatic assessment of Tesla’s technology, recently conducted a third test of FSD in a new Tesla Model 3, offering further insight into its capabilities and limitations.
Key Takeaways:
- FSD still shows significant flaws: Despite improvements in smoothness and "human-like" behavior, FSD v12.5.1.1 still committed serious driving violations during the test, including making a left turn from a non-turn lane through a red light and driving in the middle of two lanes.
- Concerns about the upcoming robotaxi event: Stein’s experience casts doubt on Tesla’s claims of achieving robotaxi-level capabilities by October, suggesting that FSD is far from being ready for widespread deployment in a driverless capacity.
- Valuation reliant on AI progress: The analyst maintains that Tesla’s valuation heavily hinges on the success of its AI projects, specifically FSD, which currently contributes $55 per share to the company’s overall valuation.
- Urging investors to scrutinize FSD: Stein emphasizes the importance of investors carefully evaluating the actual performance of FSD, which is being actively used in the real world and generating revenue, despite the ongoing concerns about its reliability.
A Third Test, A Familiar Outcome?
While Stein acknowledges improvements in FSD’s smoothness and decision-making, he highlights that the vehicle’s "human-like behavior" manifested in a rather unsettling way. The test saw FSD committing two clear driving violations—breaking through a red light and driving in an unsafe manner—which reinforces the point that the technology is still far from being reliable enough for autonomous driving.
"I feared the more straightforward route would be much easier for FSD to navigate — offering a sort of ‘half test’ that would be unremarkable. I was wrong," Stein remarked, emphasizing the unexpected and concerning nature of the test results.
The analyst’s 16-year-old son, who participated in the test alongside him, provides a stark reminder of the potential dangers of relying on FSD, even in its beta version. "My 16-year-old son came away ‘terrified.’ I wasn’t so sure," Stein reveals, highlighting the real-world anxieties that arise from using a technology that demonstrably lacks the necessary safeguards.
RoboTaxi Hopes Under Scrutiny
With Tesla’s robotaxi event scheduled for October, Stein’s findings raise serious questions about the company’s progress towards achieving truly autonomous driving capabilities. "The two illegal moves prove that FSD v12.5 does not ‘solve autonomy’ or get close to robotaxi capabilities Tesla is working on," he asserts.
Stein’s concerns are valid, considering the company’s previous pronouncements suggesting that robotaxi-level functionality is within reach. The third test, however, casts significant doubt on whether FSD is even close to being ready for deployment without human intervention.
Valuation and the Future of AI
The analyst highlights the significant valuation attached to Tesla’s AI projects, including FSD. He argues that "investors should spend some time investigating whether TSLA’s AI project with the most history, that’s generating current revenue, and is being used in the real world already, actually works."
By highlighting the $55 per share value attributed to FSD, Stein emphasizes the crucial role that this technology plays in Tesla’s overall valuation. However, he also suggests that investors need to approach their investment decisions with a critical eye, considering the demonstrable flaws that persist in FSD and the ongoing challenges in achieving true autonomy.
A Long Road Ahead for FSD
While the third test sheds light on the advancements in FSD’s smoothness and "human-like" behavior, it also underscores the significant challenges that remain in perfecting the technology. FSD’s repeated failings to navigate real-world scenarios responsibly raise serious questions about its readiness for widespread adoption.
The future of FSD and, consequently, Tesla, hinges on overcoming the persistent challenges of creating a truly reliable and safe autonomous driving system. As Stein’s third test demonstrates, the road to true autonomy is long and arduous, filled with potential pitfalls and requiring a commitment to constant improvement and safety prioritization.
