Tesla’s advancements in autonomous driving technology are becoming increasingly crucial to its growth strategy and stock performance. The company is targeting a late 2025 launch for its self-driving robotaxi service, a market opportunity that could be valued at hundreds of billions to several trillion dollars. Although Tesla has yet to deliver a fully autonomous vehicle, it continues to improve its driver-assistance software, with the latest iteration released in December 2024.
Barron’s recently evaluated Tesla’s Full-Self Driving (FSD) software to assess its current capabilities. Earlier versions, first reviewed in 2023, exhibited inconsistent behavior, combining overly cautious driving with uncertainty in various real-world scenarios. However, with ongoing updates, the system has steadily improved its ability to handle complex situations, such as intersections and challenging turns, though human oversight remains necessary.
The newest version, FSD 13.2, represents significant progress, introducing features like reduced latency and supervised self-driving from parking spots. While the technology still requires full driver attention, it now performs better in dealing with obstacles such as construction zones, pedestrians, and sharp turns. Testers and analysts have noted the improvements, with some describing its performance as increasingly comparable to a skilled human driver, even though imperfections persist.
Tesla CEO Elon Musk has projected that the technology will surpass human driving safety by mid-2025, an ambitious goal given the current state of the software. Version 13.2 has raised optimism that Tesla might meet its timeline, though analysts remain cautious, emphasizing that the system is not yet ready for fully autonomous use. The company’s ability to further enhance FSD will be pivotal in determining its success in achieving this milestone.
Tesla’s stock has seen significant gains—approximately 70%—since the announcement of its robotaxi plans in October 2024, reflecting strong investor confidence. The progress of FSD in the coming year will be a key factor in shaping the company’s market trajectory and realizing the profitability potential of its robotaxi service. While challenges remain, Tesla’s advancements suggest it is steadily moving closer to its vision of self-driving technology.