So this is the version of Full Self-Driving (Supervised) we have been waiting for, reports suggest. Electric vehicle giant Tesla (TSLA) brought out FSD version 14.3, and this is the one that was supposed to be “almost sentient,” by some reports. While there are some clear improvements, sentience may not be on the list. But investors were reasonably pleased, and Tesla shares ticked up fractionally in Wednesday afternoon’s trading.
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Trade TSLA with leverageThe biggest win with the new version of FSD is reaction time. Tesla has managed to improve it by a hefty 20% thanks to improvements to the AI compiler and runtime on MLIR. Certainly, that is welcome news; hopefully it can figure out when it is driving off a freeway overpass in time to stop itself from, you know, doing just that.
That is not all the new system brought out, as it now features a parking spot pin for the map, improvements to how the system behaves around school buses and emergency vehicles, and a public acknowledgment that it runs on Chris Lattner’s MLIR compiler infrastructure. It also stepped in to help prevent “…unnecessary lane biasing and minor tailgating behaviors.”
The 50,000 Car Problem
The improvements will certainly be welcome, but Tesla has a new problem mounting quietly in the background: used electric vehicle counts. Remember when we heard about that $16,000 repair bill because something went wrong with the battery after it went off warranty? That is likely going to scare off a lot of potential Tesla buyers, and at a time when Tesla has a huge quantity of cars available.
Tesla built a surplus of over 50,000 vehicles more than it sold, and used vehicles are coming into play with surprising rapidity. This is not only calling into question demand for Tesla vehicles, but for electric vehicles as a whole. Tesla will need to do something, and soon, to get its surpluses down, or it stands to lose quite a bit. Pivoting one plant to robots instead might be a good plan for the future, but that does little to address the 50,000 vehicle gap seen today.
Is Tesla a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 11 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. After a 27.35% rally in its share price over the past year, the average TSLA price target of $393.97 per share implies 13.25% upside potential.
