Elon Musk advises Tesla investors to sell their shares - is he right?

Earnings season is back, and major technology companies are giving investors plenty of reasons to pay attention again. Tesla, the pioneer of electric vehicles (EV), kicked off the reporting season at the end of July. In his usual manner, Tesla CEO Elon Musk shared his candid thoughts about the company's future. While Tesla is primarily known for its EVs, Musk has repeatedly made it clear that he sees the company as an artificial intelligence (AI) and robotics firm. Although autonomous driving technology remains the primary focus, these ambitions have sparked mixed reactions among investors and analysts on Wall Street. In the second-quarter earnings call, Musk didn't leave investors in suspense and stated outright: "If you don’t believe that Tesla will solve autonomy, you should not own Tesla stock. Sell your Tesla stock." These unequivocal words could be seen as Musk's way of drawing a clear line: if you are not convinced of Tesla's autonomous ambitions, you should exit. Musk refers to Tesla’s autonomous driving software as Full Self-Driving (FSD). FSD could boost Tesla's growth in two ways: first, a superior FSD technology could attract new EV buyers. Second, the Robotaxi project, a fleet of autonomous vehicles, opens up potential in markets like ride-hailing, delivery and logistics, and car rental services. However, there are risks. FSD might not scale sufficiently, and it's challenging to gauge how many people would actually buy or ride in self-driving cars. Additionally, the introduction of the Robotaxi project, initially previewed for August 8, has been postponed, fueling speculation about the maturity of the FSD technology. Moreover, the high development costs; Tesla is currently heavily investing in Nvidia graphics processors for FSD model development. If you are not convinced by autonomous driving, scaling potential, and Tesla's execution power, Musk's advice to divest from Tesla stock might indeed be correct. Many successful companies have evolved over time—Tesla included, with its transition to an AI company on the horizon. Musk's words should be seen more as a clear indication of Tesla's ambitious AI vision. As a long-term Tesla shareholder, I am convinced of this vision and view Tesla as an interesting AI opportunity. However, before taking any position, you should thoroughly analyze Musk's future plans.