The Insurance Institute for Highway Safety (IIHS) has released a study showing that Advanced Driver Assistance System (ADAS) safeguards are lacking across brands, with most of the 14 partially automated systems tested receiving “marginal” or “poor” ratings.
In a press release shared on Tuesday, the IIHS released early results from the new ratings system, noting that partial automation systems from Tesla, Ford, Nissan, and most other automakers that were tested were lacking in multiple categories. The study offered ratings of good, acceptable, marginal or poor, both overall and in specific categories.
Level 2 systems like Tesla Autopilot can improve drivers’ attentiveness: IIHS study
“We evaluated partial automation systems from BMW, Ford, General Motors, Genesis, Lexus, Mercedes-Benz, Nissan, Tesla and Volvo,” said David Harkey, IIHS President. “Most of them don’t include adequate measures to prevent misuse and keep drivers from losing focus on what’s happening on the road.”
Of the 14 partially automated systems tested thus far, only one system from any automaker was deemed acceptable, while two were rated marginal, 11 were rated poor, and none were rated good. The categories that were individually rated for each system included driver monitoring, attention reminders, emergency procedures, lane change, adaptive cruise control (ACC) resume, cooperative steering, and safety features.
The IIHS gave both Tesla’s Autopilot and Full Self-Driving (FSD) beta systems poor ratings overall, while Volvo Pilot Assist, Nissan ProPilot, Mercedes Active Distance Assist Distronic, Ford BlueCruise and several others were rated poor. Driver monitoring and attention reminders were some of the lower-rated categories across most brands, highlighting the ability for drivers to trick systems into thinking they’re being fully aware.
The research non-profit also noted that there was “little” evidence to support that partially automated systems like these are actually at the point that they currently make driving safer—though most companies target safety as a number one goal with ADAS programs.
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“Some drivers may feel that partial automation makes long drives easier, but there is little evidence it makes driving safer,” Harkey said. “As many high-profile crashes have illustrated, it can introduce new risks when systems lack the appropriate safeguards.”
The top-rated systems in the index included Lexus Teammate with Advanced Drive with an acceptable rating, along with the GM Super Cruise and Nissan ProPilot Assist with Navi-Link. Every other system was rated poor overall.
You can see the full category breakdowns from tests of Tesla’s Autopilot and FSD beta systems from the IIHS below, along with those of a few others.
Credit: IIHS Credit: IIHS Credit: IIHS Credit: IIHS Credit: IIHS
“These results are worrying, considering how quickly vehicles with these partial automation systems are hitting our roadways,” Harkey added.
“But there’s a silver lining if you look at the performance of the group as a whole. No single system did well across the board, but in each category at least one system performed well. That means the fixes are readily available and, in some cases, may be accomplished with nothing more than a simple software update.”
Below you can see overall ratings for each system tested.
| System Tested | Vehicle | Overall Rating |
|---|---|---|
|
Lexus Teammate with Advanced Drive |
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2022-2024 Lexus LS |
Acceptable |
|
GM Super Cruise |
2023-2024 GMC Sierra |
Marginal |
|
Nissan ProPILOT Assist with Navi-Link |
2023-2024 Nissan Ariya |
-
Marginal |
|
BMW Active Driving Assistant Pro |
2023-2024 BMW X1 |
Poor |
|
Ford BlueCruise |
2021-2024 Ford Mustang Mach-E |
Poor |
| -
Ford Adaptive Cruise Control with Stop & Go and Lane Centering Assist |
2021-2024 Ford Mustang Mach-E |
Poor |
|
Genesis Highway Driving Assist 2 |
2023-2024 Genesis G90 |
Poor |
|
Genesis Smart Cruise Control/Lane Following Assist |
-
2023-2024 Genesis G90 |
Poor |
|
Lexus Dynamic Radar Cruise Control with Lane Tracing Assist |
2022-2024 Lexus LS |
Poor |
|
Mercedes-Benz Active Distance Assist DISTRONIC with Active Steering Assist |
2022-2023 Mercedes-Benz C-Class |
-
Poor |
|
Nissan ProPILOT Assist 2.0 |
2023-2024 Nissan Ariya |
Poor |
|
Tesla Autopilot version 2023.7.10 |
2021-2023 Tesla Model 3 |
Poor |
| -
Tesla Full Self-Driving beta version 2023.7.10 |
2021-2023 Tesla Model 3 |
Poor |
|
Volvo Pilot Assist |
2022-2024 Volvo S90 |
Poor |
You can view the full list of rankings with individual category rankings from the IIHS here, or view the institute’s test protocol and rating guidelines here. Additionally, see the institute’s press release detailing the rating system’s early results here.
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In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
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Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
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High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
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Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
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However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
