In the ever-evolving landscape of electric vehicles and autonomous technology, Tesla continues to capture the attention of investors and analysts alike. Recent discussions have shifted the focus from traditional performance metrics to the broader implications of technological advancements. As Tesla navigates this transition, significant revelations about its future have emerged.
As the world watches Tesla’s moves closely, analysts are reevaluating what drives the company’s value. The emergence of autonomous vehicles and AI technology plays a pivotal role in shaping the company’s trajectory and potential market position.
New insights from Morgan Stanley on Tesla’s Robotaxi future
Last week, Andrew Percoco took over the Tesla analysis responsibilities at Morgan Stanley from the long-time analyst Adam Jonas. Percoco’s approach appears more cautious, offering a nuanced perspective on Tesla’s stock. His latest report focuses on the anticipated growth of Tesla’s Robotaxi fleet and the implications for the company’s future.
According to Percoco, Tesla is expected to expand its Robotaxi fleet to around 1,000 vehicles by 2026. While this number may seem modest, it is a significant stepping stone towards a more ambitious goal. Morgan Stanley forecasts that by 2035, as many as one million Robotaxis could be operational in various urban environments, marking a transformative shift in the urban mobility landscape.
This ambitious outlook brings with it several factors that investors should monitor closely:
- Opening the Robotaxi service to the public without a Safety Monitor, which is a crucial step toward widespread adoption.
- Improvements in safety metrics during operations without a Safety Monitor, essential for scaling into new regions.
- Commencement of production for the Cybercab, a purpose-built vehicle designed for autonomous operation, expected to begin in April 2026.
The Robotaxi initiative stands to be a major revenue source for Tesla as it expands its ride-hailing capabilities globally. The company is adopting a cautious approach to deployment, ensuring safety remains a priority to prevent any setbacks that could hinder progress.
Shifting focus: Deliveries losing significance for Tesla investors
In a noteworthy observation, Dan Levy, an analyst at Barclays, has pointed out a significant shift in investor sentiment regarding Tesla. As Tesla approaches 2026, the emphasis on quarterly vehicle deliveries is diminishing. This change indicates a growing recognition that the future of Tesla lies beyond traditional automotive sales.
Elon Musk has previously hinted at this shift, suggesting that the automotive segment’s contribution to Tesla’s overall valuation may decline as AI and robotics take center stage. In Musk’s words, “the future of the company is fundamentally based on large-scale autonomous cars and large-scale humanoid robots.”
Levy noted in his report that Tesla’s upcoming Q4 delivery figures “likely won’t matter for the stock,” expecting softer delivery numbers for the quarter. This is a stark contrast to previous years when delivery performance significantly influenced Tesla’s stock price.
Historically, Tesla’s stock has seen notable fluctuations based on delivery reports:
- January 3, 2022: +13.53% following record deliveries.
- January 3, 2023: -12.24% after missing delivery estimates.
- July 2, 2024: +10.20% due to exceeding delivery expectations.
- October 3, 2022: -8.61% following a severe miss attributed to a factory shutdown.
- July 2, 2020: +7.95% surpassing expectations during the pandemic.
As Tesla pivots towards technological advancements, investors are now more focused on the progress of AI initiatives and the introduction of new products rather than solely on vehicle sales. This paradigm shift may redefine how the market perceives Tesla’s growth potential.
Elon Musk hints at a SpaceX IPO
In other developments, Elon Musk has confirmed that SpaceX is preparing for an initial public offering (IPO), a move that has been speculated upon for quite some time. According to Musk, the potential IPO could provide the necessary funding to support ambitious projects, including AI integration and the development of space-based data centers.
This confirmation came after Musk responded to an op-ed by Eric Berger, a Senior Space Editor at Ars Technica, who suggested that SpaceX would soon go public. Musk’s response, simply stating, “As usual, Eric is accurate,” suggests that the IPO is imminent.
Recent reports indicate that SpaceX may aim for a valuation of up to $1.5 trillion, with plans to raise around $30 billion. Musk has acknowledged the challenges of public markets, such as litigation exposure and quarterly reporting pressures, but appears ready to take this significant step.
The anticipated IPO could not only serve to raise capital but also provide Tesla shareholders an opportunity to invest in SpaceX, thus broadening their portfolios and aligning with Musk’s vision for the future.
Impressive advancements in Tesla’s Full Self-Driving technology
Meanwhile, Tesla’s Full Self-Driving (FSD) technology is making headlines for its rapid improvements. Recent data shows a dramatic increase in the number of miles driven between interventions, a critical metric for evaluating the effectiveness of autonomous driving systems.
Following the release of FSD version 14, the FSD Community Tracker reported a jump from 441 miles to over 9,200 miles between critical interventions. This represents the most significant improvement in four years and has garnered positive attention from analysts.
Among the notable features introduced in the latest version are:
- Arrival Options, allowing drivers to select parking situations before reaching their destination.
- Overall performance improvements leading to smoother operations and refined decision-making processes.
- Enhanced safety features and reduced instances of erroneous behavior.
Despite some initial hiccups, Tesla has effectively addressed early issues with FSD v14, leading to a more robust system. Elon Musk has also indicated that future updates will continue to enhance the user experience, moving the technology closer to achieving unsupervised driving capabilities.
Piper Sandler has reaffirmed its $500 price target on Tesla shares, reflecting growing confidence in the company’s potential to lead in the autonomous vehicle market.