People shop at a Tesla store in Shanghai, China, February 17, 2024.
Cost photo | Nuphoto | Getty Images
News from the electric car giant that of Tesla progress toward rolling out its advanced driver assistance feature in China is not as revolutionary as investors treat it, according to a leading technology investor.
Mark Hawtin, chief investment officer of GAM Investment Management, focused on investing in disruptive growth and technology stocks, told CNBC’s “Squawk Box Europe” on Thursday that such expectations were misleading, not least because the Full service Tesla Self Driving does not offer fully autonomous driving.
“We should say what they’re doing — everyone’s talking about this fully autonomous driving capability,” Hawtin told CNBC. “What they’re going to be able to do in China is what they’re already doing in the US or the UK, which is some sort of assisted driving capability.”
Tesla shares rose sharply on Monday, marking their best day since March 2021, after taking a major step toward launching FSD in China. Local Chinese authorities have lifted restrictions on its cars after meeting the country’s data security requirements, Tesla announced on Sunday.
This raised hopes that Tesla’s FSD would soon be available in China. Tesla shares are up 6.7% over the past five trading days, largely driven by buzz surrounding its roadmap to bring FSD to China – as well as CEO Elon Musk’s comments on plans to begin production of more affordable models in early 2025.
But Hawtin said the company’s so-called fully autonomous driving service lacks the qualities that would make it an example of truly autonomous technology.
“It’s not yet about autonomous driving,” he told CNBC. He thinks a version of Tesla FSD capable of “true autonomy” is still five to 10 years away.
Hawtin said Tesla’s announced deal with China’s Baidu is a bigger short-term win for Baidu than for Tesla, adding that competition is intense in China with names like BYD, Huawei, Xpeng, Li Auto and Xiaomi all providing technology capable of achieving Level 2 autonomy.
Tesla has reportedly reached an agreement with Baidu that would allow Musk’s company to license Baidu’s mapping service, an essential condition for offering FSD on Chinese public roads, according to Reuters.
Tesla was not immediately available for comment when contacted by CNBC.
Full Self Driving, or FSD, is an upgrade to Tesla’s Autopilot driving assistant. Tesla does not yet make or sell cars capable of fully autonomous driving. It markets “Level 2” driving assistance systems, marketed under the FSD brand.
“Level 3” assisted driving, also known as “conditional automation,” involves systems that manage all aspects of driving, but a driver must always be present, according to standards body SAE.
Tesla has offered its FSD technology in China for years, but with a narrow feature set that limits it to operations such as automated lane changing.
GAM does not own shares of Tesla, and Hawtin said he does not personally own shares either.
— CNBC’s Lora Kolodny and Evelyn Cheng contributed to this report
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