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Tesla Inc Stock Jumps on News That Self-Driving Features Coming

Brad Moon

Tesla Inc (NASDAQ:TSLA) and its Autopilot feature have been in the news frequently in 2018, and the result has often been bad news for Tesla stock. In fact, one incident in March — in which Autopilot was being investigated in a fatal Model X crash — dropped TSLA stock to its lowest level in a year.

After a tweet over the weekend from CEO Elon Musk that the V9 Autopilot release scheduled for August will begin the rollout of self-driving capabilities, investors had a different take on the feature. On Monday, Tesla stock was up as much as 5% on the news, before closing the day up over 4.5%.

Source: Elon Musk via Twitter

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On Sunday morning, Musk took to Twitter. The Tesla CEO was responding to a customer tweet about Autopilot issues with merging traffic. Musk’s tweet included some major news:

“That issue is better in latest Autopilot software rolling out now & fully fixed in August update as part of our long-awaited Tesla Version 9. To date, Autopilot resources have rightly focused entirely on safety. With V9, we will begin to enable full self-driving features.”

That’s right. The Tesla CEO says Autopilot V9, which is scheduled for August rollout, will see the company finally begin to enable promised self-driving capabilities.

The Verge checked with Tesla, but a spokesperson said that the company would not be commenting further than Musk’s tweet.

Will Tesla Be Able to Change the Autopilot Narrative?

To date, Tesla’s Autopilot feature has had a bumpy ride. TSLA has used Autopilot as a key selling feature, but that has led to some backlash. In 2016, the company announced that all cars in production — including the Model 3 — would be equipped with the hardware to enable self-driving capability in Autopilot, assuming the owner paid extra to unlock the enhancement. The company was going to slowly enable features, with the target of unlocking full “self-driving’ capability by 2019.

However, since then there has been little movement on the self-driving front. Autopilot has been in the news, but not in a good way.

Three fatal crashes have put Autopilot under increased scrutiny. One, in which the NTSB investigated a fatal Model X crash in California, resulted in Tesla stock dropping 8.2% in a single day. In May, the company settled a class action lawsuit brought by owners who had paid extra for enhanced Autopilot features, but claimed the system was “essentially unusable and demonstrably dangerous.” Consumer Watchdog took Tesla to task last month, requesting the government investigate the company for “deceptive and unfair practices in advertising and marketing of the ‘Autopilot’ feature offered in Tesla motor vehicles.”

Bottom Line on Tesla Stock

Meanwhile, General Motors Company’s (NYSE:GM) Cadillac has been making waves with its answer to Autopilot: Super Cruise. Reviews of Cadillac’s semi-autonomous driving system have been largely glowing, with suggestions that it’s superior to Tesla’s Autopilot.

Clearly the pressure is on Tesla to begin ramping up the promised self-driving capabilities of Autopilot. The million (or multi-billion) dollar question is, will adding self-driving features into the mix break the negative news cycle for Tesla, or will the additional capabilities only make matters worse?

Based on the Tesla stock jump after Musk’s tweet, it’s clear that investors are bullish about the prospect of Autopilot finally beginning to ramp up its self-driving capabilities. If TSLA can keep to Musk’s timeline with Autopilot V9 rollout, we will find out in August if it was the right call, or if Tesla should have remained “focused entirely on safety” for a while longer.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

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