Gary Black said Tesla may need to expand unsupervised autonomy into markets serving 50% of the U.S. population, but will likely need FSD efficacy to reach 99.99% first.
- Black warned that TSLA shares may continue to lag the Nasdaq until its unsupervised robotaxi fleet scales.
- He questioned Dan Ives’ $600 bull case, noting that Tesla’s unsupervised fleet appears to be stalled at around 40 vehicles.
- Black said higher gas prices could support EV deliveries, but Tesla’s nearly 200x P/E is still hard to defend.
Shares of Tesla, Inc. (TSLA) are on pace for their worst month in over a year. Gary Black, managing director of The Future Fund, warned that the EV maker may continue to trail the Nasdaq until its unsupervised robotaxi fleet scales to more than 40 vehicles.
TSLA stock snapped a three-session losing streak on Friday, ending 1% higher at $379.71.
TSLA’s Nasdaq Lag Deepens
Black noted on X that Tesla is down 15% year-to-date, compared with a 16% gain for the Nasdaq 100, as the company’s unsupervised autonomous-driving rollout “continues to sputter.” Black took aim at Tesla bull Dan Ives’ call that the stock is headed to $600, saying that the path depends heavily on whether Tesla can scale its unsupervised autonomy fleet. “We remain skeptical with TSLA’s unsupervised autonomy fleet seemingly stalled at around 40 vehicles until efficacy improves,” Black said.
He added that some Tesla bulls are wrongly counting supervised vehicles, which use front-seat safety monitors, in their robotaxi fleet assumptions. Black called that “misleading.”
Robotaxi Scale Key To TSLA Rebound
Black said that Tesla has underperformed the Nasdaq 100 over one, three and five-year periods. Over three years, Tesla is up 48% versus 95% for the index, while over five years it is up 67% versus 99%. “I expect TSLA to continue to underperform NDX until unsupervised autonomy scales,” Black said. He said that Tesla may need to move from about 40 unsupervised vehicles to markets covering 50% of the U.S. population, citing a target that CEO Elon Musk laid out on Tesla’s July 2025 earnings call.
Black does not expect that scale-up until Tesla’s Full Self-Driving (FSD) efficacy improves. He estimates Tesla’s FSD efficacy is currently around 99%, or one intervention every 100 drives. In his view, Tesla needs to reach 99.99%, or one intervention every 10,000 drives, before unsupervised autonomy can scale decently. The gap, he argued, remains the central issue for investors trying to justify Tesla’s robotaxi premium.
Texas Crash Adds To FSD Scrutiny
Black’s comments come after the National Highway Traffic Safety Administration (NHTSA) opened a special crash investigation into a Tesla Model 3 crash in Katy, Texas, that killed 76-year-old Martha Avila. Authorities said that the driver told investigators he had been using Tesla’s partially automated driving systems when the vehicle left its lane and hit a home. Musk pushed back, saying that the crash “makes no sense” because “FSD drives slowly through neighborhood streets and this was a high speed crash.”
Tesla Autopilot Vice President Ashok Elluswamy claimed that the driver manually overrode the self-driving mode by pressing the accelerator to 100%, reaching 73 mph during the crash. The driver’s claim and Tesla executives’ statements are still under investigation.
Tesla’s robotaxi scale has also faced fresh comparison with rivals. Texas autonomous-vehicle registration data last month showed that Tesla had 42 authorized driverless vehicles in the state, compared with 577 for Alphabet-owned Waymo.
Shrinking Earnings Pressure TSLA
Black said that Tesla and other EV makers could benefit in the second quarter from “stubbornly high” gas prices, which may support deliveries.Tesla’s consensus delivery estimates point to a 6% year-over-year gain in the second quarter and a 1% rise for 2026, suggesting deliveries may avoid a third straight annual decline.
However, Black said EVs remain core to Tesla’s business, accounting for 72% of gross profit, making a 200x P/E harder to defend, while earnings shrink and unsupervised autonomy remains stalled. Black also dismissed speculation that SpaceX could acquire Tesla as a “silly idea,” citing potential dilution and governance concerns.
How Do Retail Traders Feel About TSLA?
On Stocktwits, retail sentiment for TSLA was ‘bearish’ amid a 9% rise in 24-hour message volumes. The ticker’s water base has also climbed just 2% over the past year, indicating modest retail interest in the stock.
So far this year, Tesla’s stock has lagged its “Magnificent Seven” peers, making it the group’s third-worst performer, down about 16%. Even so, Tesla’s forward price-to-earnings ratio of roughly 180x is by far the highest multiple among the Magnificent Seven stocks.
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