Don’t rate Tesla’s fully self-driving car too high, says tech investor

News about the electric car giant of Tesla progress toward rolling out its advanced driver assistance feature in China is not as groundbreaking as investors are making it out to be, according to a top technology investor.

Mark Hawtin, chief investment officer at GAM Investment Management, which focuses on investing in disruptive growth and technology stocks, told CNBC’s “Squawk Box Europe” Thursday that such expectations were misleading — not least because the fully self-driving service Tesla doesn’t offer fully autonomous driving.

“We have to say what they’re doing — everybody’s talking about this ability to be completely self-driving,” Hawtin told CNBC. “What they will be able to do in China is what they already do in the US or the UK, which is sort of this driver assistance capability.”

Tesla shares rose sharply on Monday, marking their best day since March 2021, after it passed a major milestone towards the launch of FSD in China. Local Chinese authorities lifted restrictions on its cars after passing the country’s data security requirements, Tesla said on Sunday.

This has raised expectations that Tesla’s FSD will soon be available in China. Tesla shares rose 6.7% over the past five days of trading, largely on the back of hype surrounding the FSD rollout roadmap in China — plus comments from CEO Elon Musk about plans to start production of more models available in early 2025.

But Hawtin said the company’s so-called fully self-driving service lacks the qualities that would make it an example of truly self-driving technology.

“It’s not autonomous driving yet,” he told CNBC. He reckons a version of the Tesla FSD capable of “true autonomy” is still five to 10 years away.

Hawtin said Tesla’s reported deal with China’s Baidu is a bigger short-term win for Baidu than for Tesla, adding that competition in China is strong with names like BYD, Huawei, Xpeng, Li Auto and Xiaomi all supplying technology. capable of level 2 autonomy.

Tesla has reportedly struck a deal with Baidu that will allow Musk’s firm to tap Baidu’s mapping service license, a key requirement for offering FSD on Chinese public roads. according to Reuters.

Tesla was not immediately available for comment when contacted by CNBC.

Full Self Driving, or FSD, is an upgrade to Tesla’s Autopilot driver assistant. Tesla does not yet manufacture or sell cars capable of fully autonomous driving. It sells “Level 2” driver assistance systems sold under the FSD brand.

“Level 3” assisted driving, also known as “conditional automation,” includes systems that handle all aspects of driving, but a driver still needs to be present, according to standards-setting organization SAE.

Tesla has offered its FSD technology in China for years, but with a limited feature set that limits it to operations such as automated lane changes.

GAM does not own Tesla stock, and Hawtin said he personally owns no stock either.

— CNBC’s Laura Kolodny and Evelyn Cheng contributed to this report