Can Tesla Win the Self-Driving Race?

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Automakers have been talking up the potential of self-driving cars for years, and dozens of companies are trying to bring them to market. Tesla (NASDAQ: TSLA) is laser-focused on winning the race to bring an autonomous vehicle to market but is pursuing an entirely different strategy than the rest of the industry. Will it be able to win the race? And how is it going to fund all of its ambitious growth?

In this week’s episode of Industry Focus: Energy, host Nick Sciple and fool.comcontributor Brian Feroldi talk about how Tesla’s autonomous strategy differs from the rest of the industry, its potential competitive advantage, and what needs to happen for the company to be able to finance its pipeline.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. A full transcript follows the video.

This video was recorded on Aug. 8, 2019.

Nick Sciple: The other big future driver for this company that the company raised money on back in May with this Autonomy Day is that Tesla is hoping to deliver full self-driving capability to all of its vehicles. Elon had targeted by the end of this year. We’ll see how those targets play out. When you look at the autonomy opportunity for Tesla, how are you handicapping when you expect that and the opportunity it drives for the company?

Brian Feroldi: Well, when it comes to handicapping anything getting out there, whatever Elon Musk says, you basically have to add at least six months or a year to. He says they’re going to be, I believe, feature complete by the end of 2019 and start to roll it out next year. I would guess that’s going to be a hyper-aggressive schedule, as usual, so you’ll probably actually see this out there in 2021, 2022. Investors need to know that this is a crucial development for the company. Elon has made it clear that autonomy is a major focus of the business, and they have a huge amount of competitors. There are dozens of companies around the world, many of them with billions of dollars in capital, that are throwing money to win the race to be the first company to have autonomy.

Now, Tesla, I believe, is in a unique position in that they have a massive amount of data that they’re pulling in from their fleet already, and they also are vertically integrated. They’re actually building and selling the cars themselves.

Brian Feroldi owns shares of Tesla. Nick Sciple has the following options: long August 2019 $50 puts on Tesla, long January 2020 $50 puts on Tesla, long January 2020 $100 puts on Tesla, long January 2021 $100 puts on Tesla, and long January 2021 $50 puts on Tesla. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

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