Tesla Inc. (NASDAQ:TSLA) needs to address a "critical safety issue" regarding its Full Self-Driving system's ability to detect emergency vehicles, according to prominent investor Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management.

What Happened: In comments posted on X on Tuesday, Gerber noted that while FSD version 13.2.2 shows improvement over previous iterations, it falls short of full autonomy. He revealed that Tesla is developing audio detection capabilities to identify approaching emergency vehicles, addressing a key limitation in the current system that relies primarily on visual inputs.

"Tesla now working on adding hearing so it can know when an emergency vehicle is around. Yes humans use more than one sense to drive," Gerber wrote, emphasizing the importance of multi-sensory detection in autonomous driving systems.

The development comes as Tesla continues to expand its FSD capabilities. In early December, Tesla began rolling out FSD version 13, which company CEO Elon Musk claimed would enable drivers to travel five to ten times more miles autonomously before requiring intervention.

Gerber, who also owns a Cybertruck, observed that the FSD performance in Tesla's newest vehicle appears to lag behind other Tesla models. However, he praised Tesla's overall software capabilities, noting they remain "amazingly better than any vehicle," while acknowledging improvements from competitors like Rivian Automotive Inc. (NASDAQ:RIVN).

What Happened: The comments come amid Tesla's strong market performance, with the stock recently crossing the symbolic $420 level. Morgan Stanley analysts have named Tesla their top stock pick for 2025, citing the company's advancements in autonomy and robotics.

Tesla plans to launch a ride-hailing service in Texas and California next year, subject to regulatory approval, though initial operations may require human drivers to meet state requirements.

Price Action: Tesla stock closed at $462.25 on Tuesday up 7.35%for the day. After-hours, it rose an additional 0.64%1. Year-to-date, the stock is up 86.08%, according to Benzinga Pro data.

Tesla has a consensus price target of $280.41 from 33 analysts, with a high of $515 and a low of $24.86. The latest ratings from Baird, Mizuho, and Goldman Sachs, averaging $446.67, imply a 3.99% downside.

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