Baird’s Ben Kallo believes new hardware should improve safety and functionality, and keep Tesla in the driving seat
Having the best autonomous driving features in the industry, Tesla Motors Inc (NASDAQ:TSLA) is already said to be the leader in the self-driving vehicle segment. On Wednesday evening, the automaker’s “unexpected” product unveiling suggested that it is increasing its lead with the second generation self-driving hardware suite which will shorten the time period to reach full autonomy.
Following the event, Robert W. Baird analyst Ben Kallo sent a letter to his clients, maintaining an Outperform rating on Tesla stock with a price target of $338. He also reaffirmed his bullish thesis on the electric vehicle (EV) maker.
He highlighted that now all Tesla cars coming out of its manufacturing facility in Fremont, CA are standard with the new self-driving hardware suite, which is capable of Level 5 (full autonomy) autonomous driving. The automaker said that it expects to roll out the technology in the coming months after software improvements and regulatory approval, and to demonstrate a “full autonomous cross-country drive by the end of 2017.”
Now the design studios of the Model S and Model X include autonomous driving options: Enhanced Autopilot for $5,000 and Full Self-Driving Capability for $3,000. To get the new technology, Tesla customers require $8,000 paying extra because to get the latter, they need to have the former.
The research firm believes that eight cameras, ultrasonic sonar sensors, and magnified computing power should improve the system’s functionality and safety. It noted that Tesla has the most autonomous driving miles data and improved hardware required “to maintain its status as the best autopilot system.”
Mr. Kallo added that Tesla, in his view, has the leading autonomous driving technology on the road and the new full self-driving capable hardware will “reinforce its technological advancement.”
Despite such a major product announcement, Tesla shares opened the market on a lower note and were trading down 2.69% at $198.07 as of 10:13 AM EDT.