TSLA Stock: Analyst Doubts the New Move By Tesla Motors Inc

TSLA StockTesla Motors Puts Supercomputer In Its Cars

Tesla Motors Inc (NASDAQ:TSLA) stock got a boost in the last trading session when it was confirmed that CEO Elon Musk would indeed make the announcement of unexpected product after market hours. Tesla stock gained about two percent and closed the last session at $203.56.

Musk announced that Tesla vehicles being produced at present, including the “Model 3,” will have the hardware needed for full self-driving capability at a safety level substantially greater than a human driver. Eight surround-cameras provide 360-degree visibility around the car, at up to 250 meters of range. There are 12 updated ultrasonic sensors and a forward-facing radar with enhanced processing. (Source: “All Tesla Cars Being Produced Now Have Full Self-Driving Hardware,” Tesla Motors Inc, October 19, 2016.)

The new hardware will cost around $8,000.00. But the software for fully autonomous function will take some time, as it is being refined and validated. Musk said that regulatory approval is pending, but the foundation has been laid for fully autonomous driving. The company is likely to conduct a test drive of full autonomy from Los Angeles to New York by the end of 2017. Tesla’s lead in autonomous driving is good news for TSLA stock.

However, Edmunds.com, Inc. analyst Jessica Caldwell questions the value of purchasing a self-driving car before regulations catch up. Caldwell said that, meanwhile, competitors could introduce better solutions, potentially making Tesla’s hardware “obsolete almost as soon as it’s activated for prime time.” (Source: “Tesla says self-driving hardware to be built into all its cars,”Reuters, October 19, 2016.)

It is known that Alphabet Inc (NASDAQ:GOOG) has been test-driving its self-driving cars, which use light detection and ranging (LIDAR) technology.

With this move toward full autonomy, Tesla Motors also gets ready to compete with ride-sharing services like Uber Technologies Inc and Lyft, Inc. Tesla moves closer toward its goals of building its own fleet, in which the member cars can make money for their owners while the owners are at work or on vacation.

Although Tesla stock reports its earnings on October 26, the focus is on the company’s deal with SolarCity Corp (NASDAQ:SCTY) next month. Most investors are concerned about the high cash-burn that it entails. Investors will seek more clarity on the additional financing needs of the company, as it gets set to finalize the merger and introduce new products in the near future. Elon Musk has a clear plan for Tesla, but there are concerns over its execution. TSLA stock faces a bumpy ride ahead.

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