Shares of Tesla (TSLA) are slightly down in today’s trading even after Morgan Stanley raised its price target on the EV maker from $400 to $430–with an $800 bull case price target–due to growing optimism about the potential of its robotaxi business. Morgan Stanley, led by four-star analyst Adam Jonas, emphasized the increasing importance of AI in Tesla’s future, particularly as global competition heats up. The firm expects 2025 to be the year when the market fully recognizes Tesla’s unique blend of capabilities, which will help offset challenges in the EV market.
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The firm sees the opportunity for Tesla to create steady, high-margin revenue through autonomous ridesharing and subscription-based services. Indeed, by 2030, Morgan Stanley expects Tesla’s global fleet to cover over 1 billion miles per day. In addition, the firm estimates a Tesla Mobility Fleet of 7.5 million vehicles by 2040 that could generate $1.46 in revenue per passenger mile with a 29% EBITDA margin and significantly lower cost per mile than competitors like Waymo and Uber.
Furthermore, Morgan Stanley’s bull case price target of $800 is driven by the potential for massive cost savings, as well as improved safety and performance in Tesla’s autonomous system. The forecast doesn’t even factor in additional embodied AI applications, such as humanoid robots or aviation, therefore leaving room for further upside in the future. It is worth noting that, so far, Jonas has enjoyed a 74% success rate on TSLA stock, with an average return of 30.8% per rating.
Is Tesla Stock a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 79% rally in its share price over the past year, the average Tesla price target of $322.56 per share implies 18.1% downside risk.
