This post was originally published on this site
While Tesla (NASDAQ:TSLA) CEO Elon Musk blew off yesterday’s NHTSA recall of its Full Self Driving (FSD) system as “anachronistic” and “just flat wrong,” because it was just an over-the-air software update, bearish analysts of GLJ Research believe this is a “very important development.”
They highlight the 2016 “Paint it Black” video that exaggerated the abilities of Tesla’s Autopilot as the direction of Mr. Musk.
The analysts highlight comments that Elon Musk sent to employees regarding this demo. According to Bloomberg, he said: “Just want to be absolutely clear that everyone’s top priority is achieving an amazing Autopilot demo drive,” Musk said in the email. “Since this is a demo, it is fine to hardcode some of it, since we will backfill with production code later in an OTA update,” he wrote, referring to using temporary code and updating it later using an over-the-air software update. “I will be telling the world that this is what the car *will* be able to do,” Musk continued, “not that it can do this upon receipt.”
The analysts said Tesla FSD is still incapable of the things displayed in the “Paint it Black” video. Meanwhile, they said Tesla continues to play whack-a-mole with the FSD problems, as their camera-based system “is simply NOT fit for self-driving” as it needs lidar and radar.
Further, the analysts think this is just the beginning from the NHTSA and more FSD beta recalls will be coming, citing a Consumer Reports article.
They highlight from the Consumer Reports article:
“When asked to comment on the recall, a NHTSA spokesperson sent Consumer Reports the following statement: “NHTSA will continue to monitor the recall remedies for effectiveness. This recall seeks to address a specific set of concerns identified by the agency. It does not address the full scope of NHTSA’s … investigation. Accordingly, NHTSA’s investigation into Tesla’s Autopilot and associated vehicle systems remains open and active.”
The analysts concluded that there are “fundamental problems” with Tesla’s FSD system that it will never be able to solve with a camera-only system.
“In short, this is a MASSIVE deal that investors seem to not care about… for now. We expect MORE FSD beta recalls from NHTSA, and the likely class action lawsuits that will follow,” they added. “In our view, this is MUCH bigger than VW’s “Dieselgate” fraud/scandal (link), as: (a) no one died, and (b) lives were not put at immediate risk. Lastly, as seen here, according to E. Musk himself (link), should TSLA not be able to solve its FSD problem (which this recall suggests it can’t), TSLA’s equity value is, in our view, “worthless”.”
