Tesla 'very close' to autopilot that doesn't require driver control - Piper Sandler

Electric car maker Tesla is now not far from reaching a major milestone in the development of its fully autonomous driving (FSD) software, according to Piper Sandler. The company is "very close" to the point where the technology does not require driver control, the analysts believe. Fully autonomous driving is a key asset of Tesla's car business, Morgan Stanley believes. And Deutsche Bank adds that the development of robotaxis and humanoid projects can support the company even against the backdrop of weak electric car sales.

The fully autonomous driving (FSD) software being developed by Tesla has gotten "very close" to the level where the driver no longer needs to keep their hands on the wheel and keep their eyes on the road while the system is running, according to analysts at Piper Sandler. Their assessment is cited by Yahoo Finance. The bank's analysts, led by Alexander Potter, came to that conclusion after discussions with FSD Community Tracker, an independent website that evaluates FSD's performance based on the data available to it.

"A key tracker metric known as miles to critical disengagement (miles to critical disengagement - the distance traveled on autopilot until driver intervention is required) showed a more than 20-fold improvement since the release of FSD v14.1.x in October (from 441 miles (708 km) in the previous version to more than 9,200 miles (14,806 km)). This was the largest consistent improvement in four years of data collection," Potter noted.

- Data from a robotaxi in Austin, Texas, suggests 40,000 miles (64,374 kilometers) between crashes (seven incidents recorded by federal safety regulator NHTSA for about 280,000 miles (450,616 kilometers)).

- Based on this data, with an average annual mileage of about 13,000 miles (20,921 kilometers) for most drivers, a car with FSD can go about three years without an accident, Piper Sandler suggests.

- The figures only reflect data from June through October 2025. As new data becomes available, the number of "miles to disconnect" should increase.

While the latest version of FSD 14.2.x saw a decline in performance, Potter believes that performance should improve as data accumulates for this version, which the analyst says is expected in the next three weeks and beyond. This could be big news for Tesla's robotaxi testing in Austin, Yahoo Finance writes.

"The upshot is that Tesla is probably very close to removing the security operators from the robotaxis in Austin," Potter concluded.

Potter reiterated a "buy" recommendation on the company's shares (Overweight rating - "above market") and a target price of $500. His estimate implies a 12.4% increase in the stock compared to the last closing price.

Tesla's securities were adding about 0.3% at the December 10 premarket, up 10% since the beginning of the year. They lag behind the Nasdaq Composite index of technology companies, which has risen 22% since January.

Analysts' opinions on Tesla shares diverge markedly, with a total of 20 of them advising "buy" on the paper (16 Buy ratings and four Overweight), 19 recommending "hold" (Hold), and 12 recommending "sell" (nine Sell and three Underweight), MarketWatch shows.

The coming year should be an important one for autonomous driving and robotaxis: Morgan Stanley analysts predict that 2026 will be a "turning point," Yahoo Finance writes. Morgan Stanley's new Tesla analyst Andrew Percouko is generally less optimistic than Potter from Piper Sandler, but he also praises the company's autopilot prospects.

"Fully autonomous driving is a key asset of Tesla's automotive business. We believe its advanced personalized autonomous driving system is a true game changer and remains a significant competitive advantage over other manufacturers - both electric and internal combustion engine vehicles," Percouco wrote.

On December 7, the analyst downgraded shares of Tesla from "Overweight" to "Market Perform" (Equal Weight). The analyst also raised the target price by $15 to $425 per share. This target is lower than the current price at the stock exchange ($445 at the close of trading on December 9).

Earlier, Morgan Stanley predicted that by 2050, revenue in the robotics sector will reach $25 trillion, with humanoid robots and robot cabs accounting for more than half of that amount.

Deutsche Bank named Tesla stock as one of its top picks in the U.S. auto industry, along with traditional automakers such as General Motors, Ford and Stellantis, writes MarketWatch.

"While Tesla's car business may show weak results in 2026, we believe more attention is being directed toward expanding its robotaxi business and working on humanoid robots," Deutsche Bank analysts wrote.

This article was AI-translated and verified by a human editor