The value of Tesla is related to the potential of autonomy, says Elon Musk. Autonomy is a driver of growth in the company's market value. He believes that Tesla will solve autonomy soon.
Tesla is close to solving autonomy, which is the company's value growth driver
Tesla CEO Elon Musk spoke at the VivaTech conference held this week in Paris. Among other things, he talked about Tesla. During a Q&A session, the son of the second richest man in the world, Antoine Arnault of LVMH, asked Musk, “Why is the Tesla market cap so high? Is the creation of value more challenging in traditional or innovative businesses?”
Musk responded, explaining that the company is close to solving autonomy, emphasizing that the value of the company is primarily based on this. Namely, autonomy is the main driver of Tesla's value in his opinion.
“Although I've said this before, I think we will solve autonomy soon. The value of the company is primarily on the basis of autonomy. That's really, I think, the main driver of our value,” Musk said.
Tesla already offers three autonomous driving products
For several years, Tesla has been working on a solution for autonomy. Although it is not unique in this industry, other companies have not yet achieved such a wide breakthrough as Tesla. Vehicles of the manufacturer, with the Full Self-Driving (FSD) package installed, can move in unfamiliar territories. It can be highways and city streets.
Tesla currently offers three products for autonomous driving:
- AP (Autopilot). It is the basic version available in all Tesla vehicles.
- EAP (Enhanced Autopilot). Includes additional features such as Smart Summon, Autopark, and Navigate on Autopilot (NOA) and is available at an additional cost.
- FSD (Full Self-Driving). Includes NOA, Auto Lane Change, Autopark, Smart Summon, Traffic Light and Stop Sign Control, and Autosteer on city streets and is also available for an additional cost.
Tesla Autopilot requires driver supervision
Although Tesla vehicles with Autopilot enabled are vastly superior to the competition in the field, they still require the supervision of a human driver. The latest versions of FSD Beta are getting excellent reviews from testers. Users claim they can already make many hours of driving, while not participating in driving at all. However, it is worth remembering that Tesla's self-driving technology so far always requires the supervision of a human driver, as the manufacturer itself indicates to its customers.
Tesla's value is rising
As confidence grows that Tesla will achieve autonomy, so does the value of its shares. Some analysts point to the potential of Tesla's self-driving function as the main driver of the company's growth. This week, Canadian bank RBC raised Tesla’s price target from $212 to $305. Analyst Tom Narayan wrote that the firm believes in the future of robotaxi. He believes that thanks to Tesla's industry-leading autonomous driving software, a huge number of owners will install it on their cars, which can work like a robotaxi.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.