Dear Tesla Stock Fans, Mark Your Calendars for April 3

Tesla (TSLA) CEO Elon Musk reported on April 1 that the latest version of the automaker's Full Self-Driving (FSD) system, which he has described as “the last big piece of the puzzle,” will “probably go to wide release at the end of the week.” In the wake of the update, the owners of TSLA stock should evaluate whether it is likely to meaningfully improve the deficiencies of FSD and the firm's robotaxis.

If the release does not largely rectify these shortcomings, investors should sell TSLA stock, given possible harsh sanctions by regulators, intensifying competition in the robotaxi space, and the name's very high valuation.

About TSLA Stock

The largest seller of electric vehicles in the U.S. by a wide margin, Tesla delivered 1.64 million EVs globally in 2025, down from 1.79 million in 2024. Last quarter, it handed over 358,023 EVs, up 6% versus the same period a year earlier. 

Tesla has a very high market capitalization of $1.43 trillion, while its trailing price-earnings ratio is a gargantuan 353 times. 

The Shortcomings of FSD 

On March 19, the National Highway Traffic Safety Administration (NHTSA) announced that it was launching a probe of FSD in order “to assess the system’s ability, when encountering reduced roadway visibility conditions, to detect degradation and alert the driver with sufficient time to respond.” In conjunction with the disclosure of the probe, the agency stated that ”incident data raise concerns" about FSD's ability “to detect and/or warn the driver appropriately under degraded visibility conditions.” 

Specifically, before a number of accidents, FSD had failed to “detect common roadway conditions….and/or provide alerts…until immediately before the crash occurred,” according to NHTSA.

In light of the seriousness of the issues raised by NHTSA, it would not be surprising if the agency shuts down the robotaxi program and/or FSD. But if the upcoming update significantly improves the system, the agency may refrain from taking such drastic measures.

Robotaxi Issues and Stepped-Up Competition

Since Tesla launched its robotaxi service in Austin, Texas last June, its robotaxis have had 15 crashes. According to an estimate by the news website Elektrek, the service experienced one crash every 57,000 miles between June 2025 and mid-January 2026, versus one crash every 500,000 miles for the “average U.S. driver.” That's despite reports that only four to eight of Tesla's robotaxis at any given time do not have a human supervisor in the vehicle, while “in rare cases” the EVs are driven by humans stationed in remote locations. 

Meanwhile, the competition that Tesla's robotaxis will face is intensifying, with the ridership of Alphabet's (GOOG) Waymo rapidly increasing and Amazon's (AMZN) Zoox significantly expanding the areas that it serves in San Francisco and Las Vegas. Further, Zoox plans to soon enter Austin and Miami, while Waymo in February added four more cities. On the horizon is Nvidia (NVDA) which plans to launch robotaxis on Uber's (UBER) network in Los Angeles and San Francisco in 2027.

Tesla's Valuation Is Steep

The shares' forward price-earnings ratio of 258.76 times is extremely high. Its price-book ratio of 17.41 times is also quite elevated.