What happened

The head of Tesla's (TSLA -0.23%) artificial intelligence (AI) and Autopilot team has left the company, a new blow to the company's self-driving effort. Investors reacted by sending Tesla shares down nearly 3% at the open on Thursday.

So what

Tesla's promise of eventual self-driving vehicles able to serve as robotaxis when not in use by their owners is a big part of the bull case for the electric vehicle stock. But that effort is going to have to find a new leader.

Company AI and Autopilot team leader Andrej Karpathy said late Wednesday he is no longer working for the automaker. Karpathy had been on sabbatical, but had been expected to return. In a series of tweets, he said he has no concrete plans for what he will do next, implying that he didn't leave Tesla to take an offer with another company.

The departure comes at a time when Tesla's Autopilot program appears to be at a crossroads. Last month Tesla cut more than 200 employees working on its Autopilot software as part of a broader round of cuts. And regulators have been increasing their scrutiny about how the software is marketed and used.

But CEO Elon Musk remains optimistic, in January telling investors he "would be shocked if we don't achieve full self-driving safer than humans this year."

Tesla was also the subject of some cautious commentary from analysts overnight. Influential Morgan Stanley analyst Adam Jonas lowered his price target on Tesla to $1,150, from $1,200, while keeping his overweight rating, as part of a broader pullback he is expecting in auto sales.

Meanwhile, Credit Suisse analyst Dan Levy warned of potential margin pressure in the second quarter due to coronavirus shutdowns in China. Levy expects margins to recover in the second half.

Now what

Tesla the automaker has matured past the start-up stage, and with three manufacturing facilities and strong global demand for its vehicles, it appears well positioned to ride out any economic slowdown up ahead. But Tesla the stock looks a lot less stable.

Tesla for years has been valued well above other automakers on the perceived strength of its technology. Cathie Wood's Ark Invest, for example, said earlier this year that it believes Tesla shares could be worth as much as $4,600 per share by 2026, assuming robotaxis are in service by then.

If Musk is incorrect and full self-driving isn't right around the corner, it becomes harder to justify that premium valuation. Karpathy's departure is no reason for investors to hit the panic button, but Tesla holders would be well advised to closely monitor Autopilot's progress, and regulatory pushback, in the months to come.