Tesla Motors Inc (NASDAQ:TSLA): Tesla Stock to Ride the Autopilot Wave

Tesla StockTesla Stock Inches Higher on Upbeat Sentiments

Tesla Motors Inc (NASDAQ:TSLA) has been in the news over its recent “Autopilot 2” update. Moreover, Tesla stock has staged an impressive recovery since last month, when it was trading at around $180.00 levels.

TSLA stock closed at $248.92 on Monday, and it is set to go higher. Tesla CEO Elon Musk also joined U.S. President Donald Trump on Monday morning, along with other executives, to discuss expanding the nation’s manufacturing sector.

On the latest Autopilot update, Tesla has resorted to a relatively slower rollout, as the company is focused on safety before giving its customers access to such an advanced self-driving technology. Customer safety is the prime reason behind Tesla’s slow deployment of Autopilot features, and Musk has advised owners to be careful while using the Autopilot function. (Source: “Tesla says focus on safety is driving the step-by-step Autopilot 2 rollout,” The Verge, January 23, 2017.)      

There was another reason to cheer for TSLA stock, as the U.S. National Highway Traffic Safety Administration (NHTSA) released the full findings of its Autopilot investigation last week. After completing the investigation into last year’s fatal crash that involved Tesla’s Autopilot feature, the NHTSA report has cleared the Autopilot system of any fault. (Source: “NHTSA’s full final investigation into Tesla’s Autopilot shows 40% crash rate reduction,” TechCrunch, January 19, 2017.)

Moreover, the NHTSA also noted that crash rates involving Tesla cars had dropped by almost 40% since the wide introduction of Autopilot. Tesla stock had been badly hit last year on the fatalities involving Tesla Autopilot but, finally, Tesla’s claims about Autopilot’s safety have been proven right.

There was another surprise in store when Tesla announced that ex-Apple Inc. (NASDAQ:AAPL) engineer Chris Lattner would be Tesla’s new VP of Autopilot Software. Lattner was with Apple for 11 years. In a recent interview, he shared his thoughts on self-driving technology and expressed his wish to accelerate the path to cars being appliances that solve people’s problems. (Source: “People Don’t Use The Weird Parts,” Accidental Tech Podcast, episode 205, January 17, 2017.)

This is what Lattner had to say in response to being asked why he joined Tesla: “Autopilot is a really exciting and really big problem and it kind of fits with my desire to solve nearly impossible problems and take on new things and so I’m really excited about this.”  (Source: Ibid.)

There was good news on the “Gigafactory” front as well, in which production has begun in phases. According to the company, the per kilowatt hour (kWh) cost of its battery pack can be reduced by over 30% by using economies of scale and innovative manufacturing. Investors are looking at the Gigafactory to be a leading advantage for Tesla, and a big strength behind TSLA stock.

Tesla has partnered with Panasonic Corporation (ADR) (OTCMKTS:PCRFY) to produce the batteries which will ultimately go into the upcoming Tesla “Model 3” and the company’s stationary power storage products, “Tesla Powerpack” and “Tesla Powerwall.” This segment is expected to grow faster than even electric vehicles, and has investors optimistic about the prospects for Tesla stock.

Just few days back, Panasonic’s CEO had expressed his intention to extend this partnership beyond batteries to Tesla’s self-driving system. The company is interested in developing devices like sensors for Tesla’s self-driving technology.

Tesla stock is upbeat on the flow of positive news, and it is likely to continue its upward march for the time being. Unless there is some risk to the Gigafactory or the production schedule of the Model 3, there is no reason for TSLA stock to look back.