The success of auto self-driving features always starts with introducing and demonstrating the technology. The other hurdle is government approval to test and eventually roll out the technology on public roads and highways. There are some early winners, including Alphabet’s Waymo. Tesla Inc. (NASDAQ: TSLA | TSLA Price Prediction) is catching up. Its standing in the race quickened with the approval of using Tesla’s self-driving technology in California.
The approval started with a permit from the California Public Utilities Commission (CPUC), which controls the use of self-driving vehicles on the state’s roads. The document issued by CPUC states the vehicles can “transport Tesla employees on a prearranged basis and in Tesla-owned vehicles.” The New York Times says eventually more approvals from the CPUC and the Department of Motor Vehicles will be needed. The current approval means the car must have safety driver during the tests.
Waymo has received much broader approvals, including operating its vehicles in Austin, Los Angeles, San Francisco, and Phoenix. It has applied to operate in Atlanta as well.
What This Says About Tesla
The most valuable car company in the world.
The thesis behind Tesla’s high market cap valuation is that its artificial intelligence (AI) technology is well ahead of other car companies. Despite a large sell-off of its stock, which has dropped the shares 44% this year, its market cap is $725 billion. At Ford and General Motors, the market caps are $39 billion and $48 billion, respectively. Some AI industry experts believe Tesla does have a clear lead.
AI industry chip leader Nvidia CEO Jensen Huang told Yahoo that Tesla’s full self-driving (FSD) system is the most advanced system currently available. “Tesla is far ahead in self-driving cars,” he said.
Tesla’s most advanced system is called “Autopilot and Full Self-Driving (Supervised).” It can be used in North America. However, this may not be the company’s largest hurdle. China, the world’s largest electric vehicle (EV) market, has several local EV companies that are well along with self-driving features. Tesla has yet to get approval to compete directly with them.
Even if the win in California is limited, it may show that Tesla’s valuation and its AI products and services mean it should be the most valuable car company in the world.
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