Tesla Inc. stock experienced a significant surge of over 3% in premarket trading on Thursday. This increase occurred despite the company’s failure to meet fourth-quarter revenue estimates and the announcement that existing cars would require hardware upgrades to support full self-driving (FSD) capabilities.
Controversy Surrounding FSD Technology
CEO Elon Musk admitted that the current HW3 computers in existing cars are not compatible with FSD technology, necessitating a replacement. This revelation has sparked concerns among investors and analysts, with some questioning the company’s ability to ensure FSD compatibility with future hardware versions, such as HW4 or HW5.
Criticisms from Gordon L. Johnson
Gordon L. Johnson, a Tesla bear and researcher at GLJ Research, highlighted the significance of this issue. He noted that Tesla had previously claimed that all cars produced since 2016 were equipped with the necessary hardware to support FSD. However, the fact that 80% of Tesla’s cars on the road use HW3, which is not compatible with FSD, poses a substantial problem.
Impact on Tesla’s Stock
Despite the controversy surrounding FSD technology, Tesla’s stock rose in premarket trading. The company’s plans to start production of new models at more affordable price points may have contributed to this increase. This expansion of Tesla’s portfolio could provide a much-needed boost to the company’s sales and revenue.
Key Takeaways
- Tesla’s stock gained over 3% in premarket trading, despite missing revenue estimates
- The company’s FSD technology has sparked controversy, with concerns over compatibility and hardware upgrades
- Tesla plans to produce new models at more affordable price points, which could help drive sales and revenue
Price Action
Tesla’s stock has more than doubled over the past year, with a 103% increase. The company’s shares closed 2.3% down on Wednesday but rebounded with a 3% gain in premarket trading on Thursday.
Future Developments
As Tesla continues to navigate the challenges surrounding FSD technology, the company’s ability to adapt and innovate will be crucial to its success. With plans to expand its portfolio and produce more affordable models, Tesla may be poised for continued growth and development in the electric vehicle market.