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Analyst: Tesla's Self-Driving Technology Is 'Exaggerated'

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Analyst: Tesla's Self-Driving Technology Is 'Exaggerated'

Tesla Inc (NASDAQ: TSLA) investors consider the company the leading name in driverless vehicle technology. However, Bernstein analyst Max Warburton believes the driverless technology gap between Tesla and its German counterparts is smaller than most people realize.

According to Warburton, Tesla’s biggest advantage is marketing, not technology. In a note on Wednesday, Warburton said Tesla’s Autopilot 2.0, which the company claims “has all the hardware needed for full self-driving capability,” is way behind schedule.

Tesla launched Autopilot 1.0 back in 2014, which was little more than cruise control which utilized Intel Corporation (NASDAQ: INTC)’s Mobileye technology to keep automobiles within the lanes on the road. In his new note, Warburton said Autopilot 2.0 was rolled out hastily after Tesla split with Mobileye, and the system still can’t do what Autopilot 1.0 could do.

Autopilot 2.0 includes eight cameras, but Warburton said only a few appear to be operational. In addition, the system doesn't include Mobileye’s LIDAR sensing capabilities.

Little Difference

Despite a massive valuation premium for Tesla’s stock compared to German automakers, Warburton said there's very little difference in the technology offered by Tesla and German companies who are partnered with Intel, NVIDIA Corporation (NASDAQ: NVDA) and other tech companies.

BMW (OTC: BMWYY), which has a partnership with Intel, and Volkswagen AG (ADR) (OTC: VLKAY), which has a partnership with Nvidia, are just two examples.

“While Tesla has many advantages, we believe its self-driving capabilities are exaggerated,” Warburton concluded.

Bernstein has a Market Perform rating on Tesla, BMW and Volkswagen.

Related Link: Catalysts That Keep Tesla A Top Pick At Baird: Model 3, Semi-Trucks And 'Tesla Energy'

Latest Ratings for TSLA

DateFirmActionFromTo
Nov 2020WedbushMaintainsNeutral
Nov 2020Morgan StanleyUpgradesEqual-WeightOverweight
Nov 2020B of A SecuritiesMaintainsNeutral

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