Tesla Analyst Says FSD Test Drive Shows Imperfections, 'Not Ready For Prime Time Yet'

A fourth test of full self-driving from Tesla Inc (NASDAQ:TSLA) left an analyst cautiously optimistic for the company's future in a continued series of reviews of the company's self-driving technology.

The Tesla Analyst: Truist analyst William Stein maintained a Hold rating on Tesla with a $360 price target.

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The Analyst Takeaways: A fourth test of a Tesla Model 3 with FSD v13 for Stein left the analyst feeling comfortable Tesla could solve autonomy in the future.

"We increasingly view TSLA's long-term success as inextricably linked to its ability to transition FSD from supervised to unsupervised tech," Stein said.

The analyst said the test needed no interventions, but "imperfections remain obvious."

Past test drives using FSD revealed weaknesses in the Tesla technology, the analyst said. The fourth test was "more impressive" without the need for any interventions.

While there were no interventions needed, Stein won't recommend FSD use.

The analyst said the 15-mile round-trip test required no touching of the pedals or steering wheel.

"FSD navigated around a double-parked car, and changed lanes on the highway logically. Driving was mostly smooth and human-like."

The negatives of the trip were one moving violation and "some strange behavior" with FSD failing to yield to a pedestrian in a crosswalk one of the named issues.

"We viewed this behavior as not inspiring a confidence of safety, but not worse than many less experiences or aggressive drivers."

Stein also said the Tesla vehicle followed drivers "rather closely," which could pose a safety threat. The vehicle also lingered to the edge of its lane, coming closer to barrier walls than many drivers would prefer.

"The imperfections increasingly seem to be related to sensors, not AI, which is a problem for TSLA."

Stein said AI problems could be overcome quickly. Potential sensor issues could be more problematic, the analyst said.

No interventions needed in the 15-mile loop is called "impressive" by Stein. The analyst said Tesla "may eventually ‘solve' autonomy."

"It's just not ready for prime time (let alone a robotaxi service) yet."

TSLA Price Action: Tesla stock is down 6.66% to $376.78 on Thursday versus a 52-week trading range of $138.80 to $488.54.

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