Piper Sandler Assesses Tesla's FSD Performance: No Cause for Concern
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Tesla’s Full Self-Driving Software Under Review
Tesla (NASDAQ: TSLA) has recently faced scrutiny regarding the performance metrics of its Full Self-Driving (FSD) software, particularly the v12.5 series updates. Users have expressed concerns following reports of a decline in critical performance indicators. However, analysts at Piper Sandler have remarked that these changes are not alarming and view them as an insignificant factor in the overall outlook for Tesla stock.
Performance Metrics and Community Insights
The worries primarily originate from observations made through the FSD Community Tracker, where a marked reduction in "miles-to-critical-disengagement" was noted after a series of updates to version 12.5. Initially, the v12.5 software, specifically when used with Tesla’s advanced 4th-generation hardware (HW4), demonstrated impressive performance, showcasing an impressive 494 miles between critical disengagements. This performance spurred excitement among users.
However, the subsequent updates have produced a decline in this metric. As of the recent update to v12.5.1.x, that impressive distance has diminished significantly to just 138 miles.
Expert Opinions on the Situation
Despite these metrics reflecting a downward trend, the analysts from Piper Sandler do not consider this decline a substantial threat to existing or potential Tesla shareholders. Their analysis suggests that this performance drop is likely a consequence of Tesla’s adjustments to optimize the FSD software for older hardware, specifically the HW3. Early observations indicate that vehicles utilizing the HW3 configuration exhibit even more drastic performance declines, with a notably reduced distance of only 10 miles between critical disengagements.
Though the discrepancies in performance between HW3 and HW4 vehicles are notable, Piper Sandler representatives are confident that such issues will not hinder Tesla's long-term ambitions for its FSD capabilities.
Tesla's Future Chemines for FSD Implementation
"If Tesla can successfully enhance its FSD capabilities, even leaving behind HW3 vehicles, we don’t foresee significant concerns from investors," the analysts concluded. Their forecast remains positive, maintaining an Overweight rating on Tesla’s stock and setting a price target of $300.
In addition to their current advancements, Tesla has announced plans to roll out these FSD features in Europe and China within the first quarter of 2025, contingent on securing the necessary regulatory approvals. This year, the company is focusing primarily on improving its FSD functionalities within the U.S. and also looks to incorporate these advancements into its new Cybertruck model.
Frequently Asked Questions
What are the recent updates to Tesla's FSD software?
The latest updates include version 12.5, which has raised concerns about declining performance metrics.
What is the performance drop in Tesla's FSD software?
The distance between critical disengagements has diminished significantly from 494 miles to just 138 miles in the latest update.
How does the performance compare between HW3 and HW4?
Vehicles with HW4 show significantly better performance than those using HW3, with HW3 vehicles only traveling about 10 miles between disengagements.
What is Piper Sandler's assessment of Tesla's stock?
Piper Sandler maintains an Overweight rating on Tesla's stock with a price target of $300, indicating optimistic future growth.
When is Tesla planning to introduce FSD globally?
Tesla aims to roll out its FSD software in Europe and China in the first quarter of 2025, based on regulatory approval.
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