Investing.com -- Tesla (NASDAQ:TSLA) will find it challenging to overtake competitors such as Waymo in the autonomous vehicle (AV) market, Bernstein analysts led by a Tesla bear said Thursday.
While the electric vehicle (EV) giant has been aggressively pursuing full self-driving (FSD) capabilities, analysts point out that Waymo has been conducting trials for over a decade.
“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,” analysts noted.
Bernstein notes that Tesla's founder Elon Musk has been making optimistic claims about achieving full autonomy since 2017, with little to show in terms of actual delivery.
Despite Tesla's bullish statements about its Full Self-Driving (FSD) technology, Bernstein’s team remains skeptical that the company can overcome the significant technological and regulatory hurdles required to surpass current level 4 (L4) robotaxis.
It forecasts that fully unsupervised FSD is still years away, highlighting that Musk has historically been overly optimistic about FSD timelines. In addition, 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,” analysts said. “We continue to be skeptical that Tesla can leapfrog current L4 robotaxi operators.”
The firm’s analysts believe that while Tesla could potentially gain a cost advantage if it reaches technological and regulatory parity with current AV leaders, this edge may be short-lived. They suggest that competitors would likely catch up quickly “and erode any outsized profits” for Tesla.
As for Tesla's humanoid robot, Optimus, analysts see widespread commercial use as a distant prospect. They argue that for Optimus to succeed, it would need to offer high utility at a low price, similar to products like the Apple (NASDAQ:AAPL) Vision Pro.
Moreover, industrial applications are expected to face stiff competition from more specialized robots.