Is TSLA Stock Fully Priced For Autonomy? Here's What Gary Black Thinks

• Black pointed to Tesla’s “fairly stretched” valuations and said this shows investors are already discounting Tesla’s progress in terms of unsupervised autonomy.
• Tesla is also seeing increased competition from rivals after Rivian announced Autonomy+ last week, a rival to TSLA’s Full Self-Driving (FSD) technology.

The Future Fund Managing Partner, Gary Black, on Monday stated that he is cautious on Tesla Inc. (TSLA) stock despite the Elon Musk-led company inching closer to solving unsupervised autonomous driving capability.

In a post on X, Black warned that, based on Tesla’s “fairly stretched” price-to-earnings (P/E) multiple of 210 compared to annual long-term earnings growth of 35%, which indicates a PEG ratio of 6, investors are already discounting the company’s progress in unsupervised autonomy.

Tesla shares were up more than 1% in Monday’s pre-market trade. Retail sentiment on Stocktwits around the company trended in the ‘bullish’ territory at the time of writing.

Weak Volumes

Black added that while the Tesla stock has the potential to go higher, his caution is driven by weak fourth-quarter (Q4) volumes for the EV maker.

“While TSLA stock could certainly go higher, we remain cautious given that 4Q EV volumes remain weak following expiration of the $7,500 U.S. EV credit on 9/30,” Black added.

Last week, Cox Automotive estimated that Tesla’s U.S. sales fell nearly 23% year-on-year in November to 39,800 vehicles, marking the lowest since January 2022. Cox stated that overall U.S. electric vehicle sales fell 41% in November.

Tesla’s FSD Progress

Tesla started rolling out the highly anticipated FSD 14 update to its customers in October. The FSD 14 update introduced features such as advanced parking, new speed profiles, and autopilot improvements, among other enhancements.

The FSD 14 update also introduces a tenfold increase in the neural network's parameter count compared to FSD 13, aiming to enhance the system’s intelligence and performance.

The latest FSD 14 update also improves handling of emergency vehicles, adds new arrival parking options, and includes neural network vision enhancements.

The Rivian Challenge

Tesla rival Rivian Automotive Inc. (RIVN) announced last week that it will launch its Autonomy+ subscription in early 2026, for a one-time fee of $2,500, or $49.99 per month.

This feature will allow Rivian’s second-generation R1s to drive autonomously, allowing drivers to keep their hands off the wheel for longer distances. Rivian has termed it “Universal Hands-Free,” but it still requires a human behind the wheel, ready to take control at any moment.

This rivals Tesla’s Full Self-Driving feature, which costs $99 per month and requires a vehicle with compatible hardware installed.

TSLA stock is up 14% year-to-date and 10% over the past 12 months.

Also See: Is LULU Stock 'Dead Money’? Jefferies Believes So But Calls CEO Change A 'Big Positive', Recommends Return To Roots

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