Investing.com — Tesla’s autonomous-driving lead is approaching an irreversible tipping point that could trigger one of the biggest value shifts in modern industrial history, according to a new report from Melius Research.
Analyst Rob Wertheimer said the firm recently called Tesla a “must own” because “the world is about to change, dramatically.”
Drawing on a Hemingway line about a bankruptcy happening, “two ways, gradually, then suddenly,” Wertheimer wrote that the same dynamic now applies to autonomy.
But, he stressed, “our point is not that Tesla is at risk, it’s that everybody else is.”
Melius argues that autonomy is nearing the moment when years of incremental progress suddenly give way to mass adoption, transforming what Wertheimer calls “a $7 trillion dollar sector.”
He adds that the next five years “will see hundreds of billions in value shift… to Tesla.”
Public awareness remains low. “Not even 1 out of 100 Americans have ridden in a self-driving car,” Wertheimer stated, adding that only “tens of thousands” have tried Tesla’s latest supervised FSD system. When widespread rollout arrives, “it will still shock most people.”
The catalyst, Melius says, is the accelerating improvement in Tesla’s full self-driving software, now at version 14.1.7.
Wertheimer highlights the company’s “2021/22 shift to end-to-end neural nets,” huge increases in training compute, and upcoming “AI5 chip” hardware as reasons autonomy is advancing faster than many investors realize.
Crucially, Melius argues Tesla’s lead is widening, not shrinking. Strategic choices on “chips, vertical integration, software, and the decision to think of the vehicle differently” are said to have left legacy automakers struggling with outdated architectures and fragmented supplier systems.
As driverless adoption accelerates, Melius says, “the buggy whip metaphor used so often in investing is about to become relevant again, as driverless carriages take over.”
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