Tesla Motors Inc (NASDAQ:TSLA) Autopilot Is Great, But is it a Leader?

Elon Musk Tesla Motors Inc (TSLA) and SolarCity Corp (SCTY)

Tesla Motors Inc   has been garnering a lot of attention with its Autopilot features in the last week, and more focus may be being put on the tech as a result, but that doesn’t mean the firm has what it takes to be a leader in the space. A recent report from Navigant Research points out that though Elon Musk’s firm is off to a great self-driving start, it’s missing the key attributes of a market leader.

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Tesla Motors can’t be a leader

The Navigant report scored car-makers on a number of factors related to self-driving tech and found that Mercedes Benz, which has been working in the space for two decades, was in the lead. Tesla Motors scored high in the Navigant report on things like functionality and implementation, but it’s well behind on another key factor.

In the words of David Alexander, who answered questions about the report for the Washington Post, “the influence on the overall market is going to be bigger from companies like the German manufacturers, General Motors and the likes of Ford, Volvo and Toyota, who are going to be bringing these features much more rapidly to the more general higher-volume vehicles.”

Tesla Motors is held back by itself

The report makes sense because there is no realistic model by which Tesla Motors will be able to compete on volume before other firms compete with it on self-driving tech. David Alexander says that a wide array of car-makers could leap into the lead in the coming years, but Tesla Motors isn’t one of them.

Right now Tesla Motors is planning to sell around 50,000 cars in 2015. By 2020 the firm, by its own generous forecast, will sell 500,000 units per year. Sales in the US last year came to almost 8 million. Sales across the world hit more than 71M.

Tesla Motors is going to be a tiny part of the car market by the time self-driving tech starts to heat up, and it’s going to be easier for Mercedes to make its software better than it will be for Tesla to sell more cars. That’s at the heart of the Navigant report.

Wall Street isn’t so sure

Not all of Wall Street is convinced that Tesla Motors will be held back so easily. Adam Jonas of Morgan Stanley thinks that the firm might unveil a way to change the entirety of world transport in the early part of next year. In his report Mr. Jonas said he “would be surprised if Tesla did not share formalized business plans on shared mobility within the next 12 to 18 months.”

Another Tesla Motors bull, Trip Chowdhry of Global Equities Research, reckons that the firm’s Autopilot already puts it ahead of the pack. In a note released before the firm’s software update the analyst said that the tech helped give Tesla a “formidable advantage” in the future of the car market.

Tesla Motors, again according to its own assumptions, will be held back by supply rather than demand. The firm doesn’t expect to have the plants to supply more than 500,000 cars in 2020. Getting there will, by itself, be an incredible feat, but that won’t make Tesla Motors a leader in self-driving tech.

Tesla Motors  doesn’t need to be the firm that brings self-driving tech to the world. It’s already the firm that, should its forecasts ring true, will make the EV a real mass-market car. That’s enough revolution for one lifetime, though, judging by Elon Musk’s history, and his other hobbies, there may be more change to come from the firm’s Fremont factory.

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