Tesla's autonomy lead seen as years ahead, Morgan Stanley says as Nvidia reframes the race

Morgan Stanley analyst Andrew Percoco told clients that Tesla retains a multi‑year advantage in autonomy despite Nvidia's CES demonstrations of Alpamayo, AlpaSim and related simulation and dataset tools aimed at speeding OEM development.

Tesla has lost its position as the world’s top EV seller to BYD, but attention has shifted from pure delivery figures to the next phase of competition: AI and vehicle autonomy. At CES, Nvidia put new weight behind autonomy and humanoid efforts by showcasing Alpamayo, an AI vision‑language‑action model, plus AlpaSim and a set of open driving datasets intended to help automakers scale reasoning‑based autonomy. Morgan Stanley analyst Andrew Percoco said these moves raise questions about Tesla’s competitive moat but maintained that Tesla still holds a years‑ahead advantage because of its data and scale. Key details: - BYD overtook Tesla in global sales volume in 2025, as reported in the article. - Nvidia highlighted Alpamayo, the AlpaSim simulation platform, Physical AI Open Datasets (over 1,700 hours of driving data) and Isaac GR00T N1.6 at CES. - Morgan Stanley’s Andrew Percoco told clients he believes Tesla remains years ahead on autonomy due to its data and scale advantage. - Percoco said Nvidia’s stack could provide OEMs a capital‑efficient way to advance autonomy, but full integration into production vehicles will require years for packaging, sensors, synchronization, safety validation and cost reduction. - The article reports Percoco kept an Equal‑weight rating on Tesla shares and a $425 price target, and cites Street totals of 13 Buys, 9 Holds and 7 Sells with an average price target of $405.94. Summary: The article frames Nvidia’s CES announcements as widening the options available to automakers while emphasizing that significant engineering, validation and cost hurdles remain before those tools translate into large‑scale, production autonomy. Morgan Stanley’s view is unchanged: Tesla is reported to keep a multi‑year lead, and the process for other automakers to close that gap is described as likely spanning years rather than months. Undetermined at this time.