Tesla (TSLA) investors are closely watching Elon Musk‘s relationship with President-elect Donald Trump, as federal support for self-driving car regulations could give Tesla a big boost. Indeed, Trump’s team is looking into ways to simplify rules for autonomous vehicles, which would help Tesla expand its Full Self-Driving (FSD) technology. However, experts point out that current state-by-state rules and ongoing technological challenges could make this a complicated process.
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Tesla recently showed off its FSD tech at a robotaxi event, but it still needs a human driver for safety. While Musk hopes to launch fully self-driving cars by 2025, critics say Tesla is behind competitors like Waymo (GOOGL) and GM’s (GM) Cruise in robotaxi development. Despite this, FSD is already a major revenue source for Tesla that earned it $326 million during the last quarter through upfront purchases and monthly subscriptions.
Mixed Views on Tesla’s FSD Future
Although investors remain optimistic, especially after Trump’s election, analysts have mixed views on Tesla’s FSD future. Deutsche Bank sees national standards as a potential game-changer and predicts that Tesla could roll out robotaxi services as early as next year since it doesn’t need detailed mapping or extra coding like its competitors.
In addition, Stifel raised Tesla’s price target to $411 from $287 while maintaining a Buy rating. Stifel remains confident in Tesla’s auto business and highlights the significant value potential from its AI-driven FSD technology and Cybercab robotaxi as key drivers for the increased target, based on a revised sum-of-parts analysis.
However, Morgan Stanley’s four-star analyst, Adam Jonas, cautions that Tesla still faces significant hurdles in technology, testing, and approvals, with state and local governments likely to have the final say on deployment. Still, Jonas’ sum-of-parts model values Tesla’s rideshare business alone at slightly over $50 per share.
Is Tesla Stock a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 11 Buys, 14 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 51% rally in its share price over the past year, the average Tesla price target of $233.67 per share implies 34.5% downside risk.
