Tesla (TSLA) could see penetration of its Full Self-Driving supervised system, or FSD, rise to more than 50%, which would change the financial model of the company moving forward, Wedbush said in a Tuesday note ahead of the company's Q1 earnings on Wednesday.
The company received regulatory approval for the FSD system in the Netherlands, its first approval in Europe, Wedbush analysts said. The development lays the groundwork to obtain approval for the rest of Europe, with Germany, France and Italy anticipated to follow suit over the coming months, the analysts said.
Wall Street's estimate of about $22.4 billion in Q1 revenue, with Tesla's automotive segment at around $16 billion, is not surprising given the weak demand in Europe and the US, the analysts said. Tesla's Q1 EPS is projected at $0.37, reflecting the investments it has made across the company to focus more on artificial intelligence, according to the note.
At its Q1 earnings conference call on Wednesday after-market, the analysts expect Tesla to elaborate more on its AI initiatives after around $20 billion in AI capital expenditures on Cybercab, semi production, and a new mega factory.
Wedbush maintained the company's stock rating at outperform and price target at $600.
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