Saad Ullah
Tesla (TSLA) shares surged by 4.9% after the company announced plans to roll out Full Self-Driving (FSD) software in Europe and China by 2025, exciting investors with autonomous driving advancements.
TSLA Stock Rallies on Autonomous Driving News
Tesla’s stock rose 4.9% on Thursday, closing at $230.17, marking its second consecutive day of gains. This comes despite a drop in the broader markets, with the S&P 500 falling 0.3% and the Dow Jones Industrial Average down 0.5%. Notably, this marks Tesla's first close above $230 since late July, driven by optimism around autonomous driving technology and a bullish outlook from analysts.
The positive momentum was further bolstered by Morgan Stanley analyst Adam Jonas, who reaffirmed Tesla as his “top pick” among U.S. automotive stocks. Jonas has a Buy rating on Tesla shares and maintains a price target of $310, a significant upside from its current trading levels. His endorsement added credibility to Tesla’s ongoing efforts to dominate the electric vehicle market and improve its self-driving technology.
TSLA Gains from Full Self-Driving Expansion Plans
The real catalyst for Thursday’s rally, however, was Tesla’s announcement that it would begin selling its Full Self-Driving (FSD) software in Europe and China starting in the first quarter of 2025. FSD, Tesla’s high-level driver assistance system, is expected to generate more high-margin revenue as it becomes more widely available. Currently priced at $99 per month in the U.S., the expansion of FSD into new markets is seen as a major growth opportunity for Tesla.
Cybertruck drivers will also gain access to FSD this month, while an updated version of the software is slated for release to all Tesla drivers by October. The most current version of FSD is 12.5, although some drivers still use older versions, like 12.3. The continued improvement of FSD is critical for Tesla’s long-term vision of fully autonomous vehicles.
Musk’s Tweet Fuels TSLA Surge Amid AI Optimism
Tesla’s recent stock gains were also helped by a tweet from CEO Elon Musk, who commented on his visit to Tesla’s engineering offices. Musk tweeted: “Just leaving Tesla engineering offices in Palo Alto. Most good, some bad. The future is going to be wild. There will be so many robots.” Musk’s tweet excited investors about Tesla’s future in artificial intelligence, particularly its work on AI-trained robots, which he believes could eventually rival Tesla’s vehicle business.
Although the tweet didn’t reveal any new details, it added to the broader sense of optimism around Tesla’s innovation in robotics and AI technologies.
Despite the recent gains, Tesla stock remains down about 7% since the company posted weaker-than-expected second-quarter results on July 23. Through Thursday's trading, Tesla shares are still down just over 7% for the year. Declining electric vehicle (EV) sales have also been a drag on investor sentiment, with Tesla shipping approximately 831,000 cars in the first half of 2024, representing a 7% year-over-year decline.
Conclusion
Tesla's stock continues to ride the excitement around its advancements in autonomous driving and AI technology, particularly with the rollout of Full Self-Driving in Europe and China. However, the company still faces challenges from declining EV sales and weaker-than-expected earnings. While bullish analysts like Morgan Stanley’s Adam Jonas see significant upside potential, Tesla's ability to maintain momentum may depend on its success in improving vehicle sales and delivering on its self-driving vision.
Saad Ullah
