In recent news, Tesla’s advancements towards implementing its advanced driver-assistance feature in China have sparked investor excitement. However, Mark Hawtin, GAM Investment Management’s investment director focusing on disruptive growth and technology stocks, cautioned against overstating the significance of these developments.
Hawtin, speaking on CNBC’s “Squawk Box Europe,” pointed out that the hype around Tesla’s Full Self Driving (FSD) service in China is somewhat misleading. “We should say what they’re doing — everyone’s talking about this full self-driving capability,” Hawtin told CNBC. “What they’re going to be able to do in China is what they already do in the U.S. or U.K., which is sort of this assisted-driver capability.”
Tesla’s stock surged on Monday, marking its best performance since March 2021, following a significant step towards launching FSD in China. This came after Chinese authorities removed restrictions on Tesla’s vehicles, having met the country’s data security standards.
Despite the optimism, Hawtin emphasized that Tesla’s FSD isn’t truly autonomous driving. He believes it will take another five to ten years to achieve a version capable of “true autonomy.”
Hawtin noted that Tesla’s collaboration with China’s Baidu benefits Baidu more in the short term, given fierce competition in China from companies like BYD, Huawei, Xpeng, Li Auto, and Xiaomi, all offering Level 2 autonomous technologies.
Tesla’s reported partnership with Baidu grants access to Baidu’s mapping service license, a critical step for offering FSD on Chinese public roads.
While Tesla markets FSD as a step towards autonomous driving, it currently offers Level 2 driver-assistance systems, not fully autonomous vehicles.
In summary, while Tesla’s progress in China is notable, it’s essential to temper expectations. The road to true autonomous driving remains long, and the competitive landscape in China is intense. Hawtin clarified that neither he nor GAM Investment Management owns shares in Tesla, emphasizing a cautious view amidst the buzz surrounding Tesla’s advancements.