Prominent analyst and investor Gary Black, a partner at Future Fund, believes Tesla is scaling back its autonomous driving ambitions, eroding investor confidence in the company's ability to achieve a breakthrough in self-driving technology.
On Tuesday, Black posted a series of messages on X, arguing that Tesla's slowdown in deploying unsupervised Full Self-Driving (FSD) and Robotaxi services points to "deep-seated underlying reasons."
Black noted that Tesla initially planned to have its autonomous vehicles cover half of the U.S. population by the end of last year. The company later revised its target to a "doubling of fleet size monthly," but according to recent comments from Tesla's AI chief, Ashok Elluswamy, during a second-quarter earnings call, the latest plan now targets a growth rate of just "10% per week."
Black added that any headline involving a Tesla vehicle equipped with FSD causing injury would have a "devastating negative impact," forcing the company to slow its rollout. However, he said the root cause of Tesla's underperformance relative to the broader market is that investors no longer believe FSD technology can scale using the current fleet of 90 to 100 safety-driverless vehicles.
Black then compared Tesla's operations to Waymo, Google's autonomous driving subsidiary. Waymo currently operates 4,000 safety-driverless vehicles that complete over 500,000 Robotaxi trips per week.
X user Jeff Lutz disagreed with Black, arguing that if autonomous driving were facing such problems, Tesla would not be continuously hiring. In response, Black said Tesla's reluctance to aggressively deploy autonomous driving services might indicate internal management concerns that FSD's safety is not as high as the public believes.
Black added that Tesla's hiring and infrastructure build-out are based on the assumption that the company can solve all edge cases and eventually raise autonomous driving reliability to 99.999%. However, the investor pointed out that competitors are also making continuous progress.
"For cost reasons, Tesla chose a vision-only technical route and now has to continue down that path, hoping that competitors, even with more investment, won't develop safer autonomous driving technology," Black said.
Black also warned against relying solely on management statements about autonomous driving readiness. "In my 30-year career in investing, I've learned a lesson: never take only management's word for anything," he said. Executives are obligated to project optimism, and that is part of their job responsibilities.
Comments