Key Highlights
- With Tesla set to face potential regulatory changes in California, analysts see minimal risk to sales and expect business to adjust without any impacts on operations.
- In an investor note, the firm highlighted how the State of California has issued a document which states that Tesla may be subject to sales suspension in California for 30 days if it doesn’t change the way it is marketing its Autopilot system.
- Pixabay/Public Domain “Per a Bloomberg report and a document filed by the State of California, Tesla could be suspended from sales in California for 30 days if it does not change how it is marketing its Autopilot system, although this order is stayed for 90 days to give Tesla time to comply.” Tesla will be able to gain compliance by either abandoning the use of the name “Autopilot” for features that aren’t L3 or higher, or enhancing the Autopilot capabilities to reach an L3 or higher threshold.
- “Recall that L3 technology is when vehicles become situationally eyes-off.
- Our initial view is that we would not expect a disruption to Tesla’s business in California, given that the ruling gives Tesla time to comply, and given that Tesla has changed or used alternative names when marketing ADAS features in the past.
