Tesla Stock Dips Amid Market Shifts, FSD Expansion

A driver demonstrated the 'Guardian Angel' system re-engaging to avoid hitting a curb, a capability Tesla AI chief Ashok Elluswamy described as an intervention occurring even when the software is otherwise disengaged.

Ashok Elluswamy, Tesla's AI chief, highlighted the system's ability to intervene, with a driver demonstrating how FSD re-engages to avoid hitting a curb, showcasing its proactive safety measures.

With Croatia’s authorization, the system is now approved in 16 markets worldwide and eight across Europe, though a European safety council is pushing for restrictions on functions like speed offset ahead of a December vote.

Despite this progress, a European safety council is pushing to block certain FSD functions, such as speed offset, and the official EU vote on these regulations has been delayed until December.

The number of registered Cybercabs in Texas grew by over 50% in the last week, with total deployed units reaching 50 within the first month of launch.

Economist and investor Jo Bhakdi suggests that this rapid deployment rate is a crucial indicator of Tesla executives' confidence in the latest FSD V14/V15 features.

Bhakdi argues that current stock performance does not fully reflect the significant potential of the accelerating Cybercab rollout.

Jo Bhakdi observes that Cybercab deployment speed has dramatically increased since last year, with Tesla now on a significantly different trajectory compared to the same period in the previous year.

He advises investors to focus on these long-term data trends rather than reacting to short-term stock performance fluctuations, as the company's infrastructure and technology integration are rapidly progressing.

Croatia has approved FSD Supervised, making it the 16th country to do so, with a rollout expected to begin soon.

However, the European Transport Safety Council (ETSC) objects to specific FSD functions, including speed offsets above detected limits and pacing with surrounding traffic, leading to a delay in a critical EU vote on FSD adoption from October 6th to December.

Jo Bhakdi speculates that European auto industry lobbyists, particularly in Germany and France, are actively working behind the scenes to stall FSD approval.

Concerns arise from the influence of government-owned automotive interests, such as Volkswagen, which is 20% government-owned.

Politicians are caught between supporting powerful local industrial lobbies and avoiding public backlash for impeding the adoption of safety-improving technology, creating a significant regulatory battle.

Xpeng is offering its version of FSD for free to gather data, and Bhakdi considers them the second-best company in the market due to their comprehensive capabilities.

Despite strong entrepreneurship and innovation from Chinese competitors, Jo Bhakdi asserts that Tesla maintains superior control over the political landscapes in the US and Europe.

On a purely technological level, Tesla is deemed more formidable than rivals like BYD, highlighting its advanced capabilities.

For FSD to be approved in Europe, countries representing 65% of the population must agree, which means Germany, Italy, and France are key to securing approval.

The political internal conflicts within Germany make the outcome of these regulatory decisions difficult to predict.

The necessity for these major economies to align adds a significant layer of complexity to Tesla's European market entry and expansion efforts.

Anthropic is expected to file for an IPO after the November US midterm elections, with its fiscal year 2025 revenue projected at $5 billion, representing a 1,000% growth.

Despite this impressive growth, the company has reported an $8 billion operating loss and $518 billion in future infrastructure obligations.

Concerns regarding its valuation arise from a projected $2 trillion valuation, which would place it at over 400 times its fiscal year 2025 revenue, according to Jo Bhakdi.

Anthropic is rumored to have a run rate of $100 billion and is being compared to a $2 trillion valuation, while SpaceX recently achieved a $1.7 trillion valuation following significant technical accomplishments.

Jo Bhakdi argues that these multi-trillion dollar valuations, though seemingly large, are still relatively small considering the vast long-term market potential and future growth trajectories of these companies.

Anthropic's corporate filings include explicit warnings that advanced AI could pose catastrophic or existential risks to humanity.

The speakers noted the irony that high-profit companies are acknowledging these massive potential liabilities for existential threats in their official disclosures.

Jensen Huang mandates that all AI models undergo evaluation within an Nvidia-controlled environment, a framework that slows deployment through regulatory friction while simultaneously driving long-term demand for compute.

This framework mandates that companies test their AI agents within an Nvidia-controlled environment, introducing 'testing friction' that slows the overall pace of AI advancement.

By establishing these regulatory hurdles through extensive testing, Nvidia effectively increases the demand for compute, securing its own growth while simultaneously reducing liability for large AI firms by making them prioritize safety.

Jo Bhakdi likens AI agents to 'a million 14-year-old Einsteins with supercomputers' that might act recklessly, and companies are mitigating personal liability by explicitly detailing these operational and security risks in their filings.

Current AI benchmarks show Anthropic's Claude and OpenAI's models frequently leapfrogging each other in performance, while Grok maintains a competitive position in the third-tier among top-performing Large Language Models (LLMs).

Elon Musk's public projections for Grok have shifted from claims of immediate dominance to a more precise and humble outlook, a change noted by Jo Bhakdi as indicating more substantive progress through a focus on technical accuracy rather than aggressive marketing.

Meta and Google are re-emerging as serious competitors in the AI space, suggesting that large incumbents with deep AI staffing can quickly catch up to or even leapfrog current leaders.

Rumors surrounding Gemini 4 indicate the potential for massive shifts in industry capabilities, underscoring the highly competitive nature of AI development where positions can change rapidly.

Tesla's stock movement is heavily influenced by supply and demand mechanics, rather than solely by fundamentals, with negative catalysts like JP Morgan's underperformance reports creating downward pressure.

Market momentum often leads to vertical price swings in both directions, and currently, capital is being diverted towards 'shiny' AI stocks such as Nvidia and Bitcoin, weakening short-term demand for Tesla shares.

Tesla's stock requires a major catalyst, specifically the significant scaling of Cybercab, to reach all-time highs and achieve a substantial repricing in the market.

Current growth is incremental, which fails to generate the short-term market momentum needed for rapid gains, but historically, the stock exhibits vertical price movements once a strong catalyst emerges.

Jo Bhakdi maintains a long-term bullish outlook, anticipating a move towards the $500–$600 range once Cybercab expansion gains significant traction.