Tesla (NASDAQ:TSLA) shares have been one of the biggest winners in 2023. With the stock pushing towards $300, it seems a world ago that investors were questioning whether Tesla was on the right track.
So, have I missed my chance to buy? Well, maybe not. Here’s one development that could send the share price soaring.
Self-driving vehicles
Tesla has been at the forefront of developing and promoting autonomous driving technology. It has made significant advancements in the area, with its well-known Autopilot feature.
CEO Elon Musk has been vocal about his vision for self-driving cars and has set ambitious goals for Tesla’s autonomous driving capabilities. He believes the company will achieve full self-driving capability this year. He’s also suggested that the next Tesla vehicle would have an “almost entirely autonomous mode”.
Musk speaks his mind. However, he has a history of overpromising and underdelivering. So, it may not be this year, and it may not be the next vehicle, but I’m confident that fully-autonomous vehicles will be delivered by Tesla eventually, and likely, ahead of the competition.
Truly viable
The adoption and future success of self-driving vehicles depend on several factors, including technological advancements, regulation, consumer acceptance, safety considerations, and infrastructure development.
While there is significant interest and potential for self-driving vehicles, there are also some uncertainties.
But, for me, it’s clear that autonomous vehicles are part of the future. But if trialing goes wrong, again, we could see more delays.
In the US, manufacturers can deploy autonomous vehicles without manual controls, so long as they meet other standards. In the UK, testing is permitted as along as a human operator is ready to take control of the car if necessary.
It’s a truly viable technology, but global adoption could take time.
Another revenue source
The leading-EV manufacturer has suggested it has plans to use autonomous vehicles as part of a ride-hailing or taxi service, similar to Uber and Bolt.
Musk has previously raised the concept of a “Tesla Network“. This would allow owners of autonomous Tesla vehicles to offer their cars as self-driving taxis when they are not being used by the owners themselves.
So, while Tesla’s vehicle sales are surging today, autonomous vehicles could be an important revenue stream in just five years.
It’s expensive
After the recent surge, Tesla now trades with a forward price-to-earnings of around 90, meaning it’s phenomenally expensive. However, all high-potential stocks trade at high multiples.
Meanwhile, Porsche AG — which also has a promising future in the EV sector — trades at just 19 times earnings and pays a dividend, which Tesla doesn’t.
So, while I’m optimistic about Tesla’s future in autonomous vehicles, the stock has become a little expensive. I’m keeping my powder dry, but the autonomous vehicle angle is something I’m going to be keeping a very close eye on. If we see a smooth route to adoption, I see the share price soaring even further.
