Tesla Motors Inc May Have A Head Start In Driverless Tech

Tesla Motors Inc May Have A Head Start In Driverless Tech

Tesla Motors has scheduled a business update for tomorrow and is expected to unveil a software update to increase the range of the Model S even further. The conference call is scheduled for noon Eastern on Thursday.

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But leadership in the range of electric vehicles may not be the only area in which Tesla is ahead of other automakers. Stifel analysts suggest the EV manufacturer may be closer to putting driverless cars on the road than any other automaker.

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Tesla CEO focused on self-driving cars

Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk said this week that at some point, self-driving cars will be the norm and that lawmakers may one day outlaw human-driven vehicles. He also said it will take decades for that to happen, but in a research note dated March 17, Stifel analyst James Albertine suggested that the update they will talk about tomorrow could be packed with more goodies than just increased range.

He thinks Tesla Motors Inc (NASDAQ:TSLA) management will highlight some features of upcoming software updates that will deal with “semi-autonomous” cars. He also thinks investors aren’t fully aware of how far Tesla may be ahead of other automakers in some of the newest and most advance technologies.

Driverless cars not too far off

The Stifel analyst said he listed to a “high-level discussion” between Musk and Nvidia CEO Jen-Hsun Huang. The two were discussing driverless vehicles, and he said it sounds like Tesla is rather far along in the development process. In fact, Albertine said self-driving cars may be closer than anyone realizes.

He added that Nvidia described the technology as having an imminent “big bang” in driverless technology. The component maker revealed a new product it calls DRIVE PX, which is actually a $10,000 kit for developers for driverless vehicles. The kit will be available within the next few months.

Tesla in a good position

Albertine believes Tesla is in “a more advanced competitive position” in self-driving technology, as the automaker referred to it as a “solved problem.” The analyst said it appears as if the solution relates more to hardware and building it on the “backbone” of software that already exists and is currently learning or adapting to real-life scenarios.

Based on the conversation between Tesla and Nvidia, he thinks Tesla is already able to send semi-autonomous driving features out to its vehicles through over-the-air updates to Model S sedans that are already on the road. Active cruise control is one such feature.

In the long term though, Tesla thinks building a fully self-driving car requires both new hardware with more sensors and more development of Nvidia’s processors and adaptive learning technology. As a result of Tesla’s apparent advantage in driverless technology though, Albertine is less worried about upcoming electric vehicles from competitors.

As of this writing, shares of Tesla Motors Inc (NASDAQ:TSLA) were up 1.7% to $198 per share. Albertine continues to rate Tesla as a Buy with a $400 per share price target.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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