Goldman Sachs maintains a neutral stance on Tesla $TSLA with a price target of $175, following reports of Tesla leveraging Baidu’s ($BIDU) mapping and navigation technology to introduce Full Self-Driving (FSD) capabilities in China.
Historically, Tesla has concentrated its FSD research and development efforts in North America. However, Goldman Sachs believes that while much of Tesla’s engineering work could be globally applicable, localized enhancements will be necessary for the Chinese market.
Compliance with Chinese government regulations concerning data access, localization, and artificial intelligence (AI) presents potential challenges for Tesla in sharing technology within and outside of China.
Goldman Sachs analysts emphasize that the pace and scope of Tesla’s enhancements to its FSD technology will significantly influence its impact on the company’s Chinese operations. This impact encompasses direct FSD sales, its contribution to overall vehicle sales, and the potential for licensing agreements.
While FSD remains a supervised product, Goldman Sachs acknowledges Tesla’s application of end-to-end neural networks as a factor that could accelerate product development beyond their base case expectations.
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