The analyst also noted in a CNBC interview that Tesla owners paying the additional $8,000 upgrade for existing vehicles to adopt FSD would result in a big boost in profit margin. That would help provide a return on the huge amount of capital Tesla spends on artificial intelligence (AI) infrastructure to develop FSD.

Tesla shares edged higher in early Friday trading as investors looked to claw back some of the losses tied to its disappointing delivery figures while adjusting to price target changes from analysts on Wall Street.

After a monstrous stock rally following November’s presidential election, Tesla (TSLA) reported its first annual decline in electric vehicle delivery, highlighting the growing disconnect between its high-flying stock price and its core automobile business.

The shares dropped more than 6% to start a new year of trading after the company reported weaker-than-expected fourth-quarter deliveries.