Tesla Has 'Effectively' Achieved Level 4 Autonomy, Says Piper Sandler Analyst – How A Trip To Minneapolis Strengthened His Conviction

• Piper Sandler’s Alexander Potter noted that the uncertainty surrounding Tesla's Full Self-Driving software is compounded by the lack of universally accepted data for directly comparing metrics such as disengagements and crashes.
• Despite those concerns, he believes Tesla has effectively achieved Level 4 autonomy.
• The analyst cited the company's rollout of FSD subscriptions, expansion of its robotaxi service, efforts to secure permits for robotaxi infrastructure, and plans to build the Cybercab without a steering wheel or pedals.

Tesla Inc. (TSLA) has “effectively” achieved Level 4 autonomy, according to Piper Sandler analyst Alexander Potter, who noted that skeptics often cite the greater number of robotaxis deployed by Alphabet Inc.’s (GOOG, GOOGL) Waymo.

According to TheFly, Piper Sandler has an ‘Overweight’ rating on TSLA stock with a $500 price target, implying an upside potential of nearly 25% from Tuesday’s closing price.

Tesla’s shares were down nearly 0.5% in Wednesday’s opening trade.

Piper’s Thesis On TSLA’s L4 Autonomy Status

Potter noted that the uncertainty surrounding Tesla's Full Self-Driving (FSD) software is compounded by the lack of universally accepted data for directly comparing metrics such as disengagements and crashes.

Despite those concerns, he believes Tesla has effectively achieved Level 4 autonomy. The analyst cited the company's rollout of FSD subscriptions, expansion of its robotaxi service, efforts to secure permits for robotaxi infrastructure, and plans to build the Cybercab without a steering wheel or pedals.

Potter added that a trip in April during which his Tesla drove him from Missoula, Montana, to Minneapolis further strengthened his conviction.

Level 4 autonomy refers to a high level of self-driving capability, in which a vehicle can operate without human intervention under specific conditions or within a defined area.

TSLA Expands FSD In Europe

Meanwhile, Tesla has been expanding the availability of FSD Supervised in Europe, adding a fourth country to the list after gaining approval in Denmark on Tuesday.

Tesla’s FSD Supervised was previously available in the Netherlands, Lithuania, and Estonia.

The company claims that FSD Supervised is seven times safer when engaged than a human driver. Tesla states that more than 11 billion miles have been driven using the technology.

Apart from the four European countries, Tesla’s FSD Supervised is currently available in the U.S., Canada, China, Mexico, Puerto Rico, Australia, New Zealand, and South Korea.

JPMorgan Highlights Tesla’s ‘Unmatched’ Advantage

JPMorgan highlighted Tesla’s “unmatched” advantage over competitors in a note last week, citing its industrial-scale manufacturing footprint, vertically integrated hardware and software ecosystem, and rapid pace of technological development. The firm argued that Tesla sits at the forefront of "physical AI" and is beginning to address entirely new, largely untapped markets.

JPMorgan forecasts an earnings inflection point for Tesla in 2028, followed by roughly 50% annual earnings growth through 2030 and beyond.

The firm raised its price target for Tesla to $475 from $145 and upgraded the stock to ‘Neutral’ from ‘Underweight’.

Waymo’s Robotaxi Footprint

Waymo’s robotaxis are operational in 10 U.S. cities, with 21 more in the pipeline. The company states that its robotaxis have driven for more than 200 million miles, and currently has more than 3,700 robotaxis in service.

Waymo announced the launch of its sixth-generation robotaxis in February this year, with the aim of reducing costs while maintaining its safety standards.

How Did Retail Investors React To TSLA Stock?

Retail sentiment on Stocktwits around Tesla trended in the ‘bearish’ territory at the time of writing.

TSLA stock is down 12% year-to-date, while GOOGL stock is up 16%. The S&P 500 ETF (SPY) is up 22% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 32%.

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