In February 2017, Cathie Wood went on Bloomberg Television to make her case that the $10 trillion global mobility market would be severely disrupted by electric vehicles and networks of autonomous taxis. Tesla was “leading the charge” in EVs and had its eye on robotaxis, she said.
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This half-right assessment helped turn Wood and her firm, Ark Invest, into household names. The shift to batteries from combustion engines has been hugely disruptive to the auto industry, and Tesla remains the global EV leader.
Setting up networks of autonomous taxis, on the other hand, has proven far more difficult than Elon Musk and others expected. Alphabet spinoff Waymo and General Motors-owned Cruise have set up small fleets of driverless vehicles in select cities, but the scores of robotaxis Tesla’s chief executive officer promised years ago are still missing.
Wood is undeterred. During a Bloomberg Intelligence webinar on Wednesday, she predicted EV sales will go to 60 million in five years, three times more than what she said is the consensus estimate. She described Tesla’s plans for autonomy as much more important than its EV strategy. About two-thirds of Ark’s $1,500 price target for the shares over the next five years — the stock trades around $200 now — is because of autonomy.
Wood even used the same phrase she did six years ago: “Tesla, from a thought leadership point of view, is leading the charge, so to speak, in this movement toward autonomous electric vehicles,” Wood said.
While Musk has indeed done a lot of thinking about autonomy, Tesla isn’t leading in the field. Human drivers remain responsible for operating its vehicles at all times, including once they’ve engaged a product the company has marketed for years as Full Self-Driving Beta, or FSD Beta. Tesla acknowledged as much one week ago when announcing a recall of what it called a driver-support feature.
In its recall report, Tesla said it disagreed with an analysis by the National Highway Traffic Safety Administration that had identified concerns with how FSD Beta handled certain roadway environments.
The filing is curiously worded. It refers to Teslas traveling through “a stale yellow traffic light,” which at least suggests cars using FSD Beta may be running through red lights. It also refers to “the perceived duration of the vehicle’s static position at certain intersections with a stop sign, particularly when the intersection is clear of any other road users,” which is a long way of saying Teslas at least appear to be performing illegal rolling stops. Tesla filed a recall notice a year ago to address this via an over-the-air software update.
Read the full article here by Craig Trudell, Advisor Perspectives.
