Earlier today, Elon Musk, the CEO of Tesla (TSLA), stated on X that the EV maker is developing a major update to its Full Self-Driving (FSD) system. Indeed, the new version will see big video quality improvements and will be about 10 times larger than the current model, which means that it will use far more data and processing power. Musk also said that the upgrade is being tested now and could be ready for public release by the end of next month if everything goes smoothly.
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For reference, FSD is Tesla’s advanced driver-assistance feature that is designed to handle most driving tasks with limited help from the driver. It builds on the company’s Autopilot system, which is already available in markets like Europe and China, but still requires drivers to stay alert with their hands on the wheel. Nevertheless, the new model’s size increase should allow it to process information better from the car’s cameras and sensors, thereby helping it better understand its surroundings and drive more effectively.
It is worth noting that this update is key to Tesla’s strategy of making self-driving technology a major source of its future growth. In fact, the company recently launched a robotaxi service in Austin, Texas, but its core car sales have been struggling. More specifically, automotive revenue fell by 16% in the second quarter, and sales in Europe have also declined. As a result of this decline, combined with the reputational issues tied to Musk’s political involvement, Tesla’s stock has dropped by 21% so far this year, which adds pressure for the company to show progress on autonomy.
What Is the Prediction for Tesla Stock?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 14 Buys, 15 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average TSLA price target of $306.39 per share implies 3.4% downside risk.
