Investor's Corner
Tesla has Morgan Stanley taking bullish and bearish stances in China
Tesla’s (NASDAQ: TSLA) automotive operation in China has Morgan Stanley analysts taking bullish and bearish stances. A new note from the Wall Street firms indicates short-term growth and possible electric vehicle sector domination. However, long-term perspectives align with past Morgan Stanley outlooks that hint toward Tesla’s decline and subsequent inferiority in the Chinese market.
Following the news of Tesla vehicles being banned in military or government facilities late last week, Morgan Stanley released a new note that revealed several important metrics that could be affected by the ban. The firm’s short-term outlook seems bullish, especially as it highlights the advantages Tesla holds financially in China and its popularity with Chinese car buyers, who have flocked to the company’s all-electric vehicles since first being delivered in early 2020.
Tesla and China: 7 Thoughts | Morgan Stanley$TSLA pic.twitter.com/YxuJWFWuWK
— David Tayar (@davidtayar5) March 22, 2021
“We estimate well over 50 to 60% of Tesla’s global profitability is currently derived from China,” Morgan Stanley analysts revealed as the first of seven points in the note. Giga Shanghai, Tesla’s Chinese production facility, is currently producing 450,000 vehicles annually, the company said in its most recent Shareholder Deck. While some of those vehicles are being exported to Europe to help supplement the Fremont factory’s production, most of them stay in China to help feed the overwhelming demand that has been sustained through consumer loyalty. Tesla has done a great job of expediting production timeframes to keep up with healthy demand. It surely is helping fuel the company’s profitability, which has spanned through the six previous quarters.
Additionally, Morgan Stanley stated that it “believes automobiles will transform into a transportation utility, where companies will fight for a winner-take-most network at a regional/national level.”
With Tesla dominating 2020 EV sales in China, mostly in part to the Model 3 that held 11% of the total market share, the company sits in a prime position to dominate the market for years to come. While the Wuling HongGuang Mini EV has outsold the Model 3 for several months, it isn’t easy to compare the two vehicles. Price, range, performance, and luxury are all incomparable because the Model 3 dominates nearly every category except for the price. While the HongGuang Mini EV is more affordable because it is only $4,500, it is undoubtedly a budget vehicle. It has just over 100 miles of range, and standard features, like air conditioning, will run consumers an extra $500.
While some of Morgan Stanley’s new note gave off bullish tones, several points came off bearish, especially one point that seemed to align with analyst Adam Jonas’ prediction that Tesla would not sell a car in China by 2030.
“We forecast Tesla China volume peaking in the year 2027 at just under 900k units and declining from there,” the note said. “Beyond 2030, our implied growth rate and terminal valuation of Tesla’s China business includes a significantly diminished contribution from China.”
In October 2020, Jonas said that Tesla’s raging success in China would come to an end. “We have China sales peaking [in the] middle of the decade and then going down…and then eventually nothing after 2030,” Jonas said to Yahoo Finance. Interestingly, Jonas’s prediction was mostly based on the fact that the U.S. government would likely not want Chinese autonomous vehicles traveling around the country. This situation is extremely similar to the ban China put on Tesla vehicles entering military and government-owned facilities last week.
Tesla to sell zero cars in China by 2030, Morgan Stanley’s Jonas says
“Can you imagine a Chinese internet of cars autonomous network operating in the streets of Boston in 10 years? Of course not. Wake up. It’s not happening,” Jonas added. “And so this idea that the Chinese aren’t allowed to use AI network machine learning data privacy networks from the state, but it’s okay for us to do [it] there, is just a fallacy in our opinion.”
It seems like a longshot that Tesla will simply dissolve into nothing in China by 2030. However, Jonas believes that rising tensions between the U.S. and China could point toward privacy taking priority, and autonomous vehicles will raise suspicion that they could be used as spy devices. If this were to happen in 9 years, Tesla would lose a considerable chunk of its profitability because of China’s influence on the company’s financials. However, this remains to be seen, and many Tesla bulls believe that the company holds a long future in China that could spell trouble for competing automakers for years to come.
Disclosure: Joey Klender is a TSLA Shareholder.
Investor's Corner
Tesla enters new stability phase, firm upgrades and adjusts outlook
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
Tesla is entering a new phase of stability in terms of vehicle deliveries, one firm wrote in a new note during the final week of October, backing its position with an upgrade and price target increase on the stock.
Dmitriy Pozdnyakov of Freedom Capital upgraded his outlook on Tesla shares from “Sell” to “Hold” on Wednesday, and increased the price target from $338 to $406.
While most firms are interested in highlighting Tesla’s future growth, which will be catalyzed mostly by the advent of self-driving vehicles, autonomy, and the company’s all-in mentality on AI and robotics, Pozdnyakov is solely focusing on vehicle deliveries.
The analyst wrote in a note to investors that he believes Tesla’s updated vehicle lineup, which includes its new affordable “Standard” trims of the Model 3 and Model Y, is going to stabilize the company’s delivery volumes and return the company to annual growth.
Tesla launches two new affordable models with ‘Standard’ Model 3, Y offerings
Tesla launched the new affordable Model 3 and Model Y “Standard” trims on October 7, which introduced two stripped-down, less premium versions of the all-electric sedan and crossover.
They are both priced at under $40,000, with the Model 3 at $37,990 and the Model Y at $39,990, and while these prices may not necessarily be what consumers were expecting, they are well under what Kelley Blue Book said was the average new car transaction price for September, which swelled above $50,000.
Despite the rollout of these two new models, it is interesting to hear that a Wall Street firm would think that Tesla is going to return to more stable delivery figures and potentially enter a new growth phase.
Many Wall Street firms have been more focused on AI, Robotics, and Tesla’s self-driving project, which are the more prevalent things that will drive investor growth over the next few years.
Wedbush’s Dan Ives, for example, tends to focus on the company’s prowess in AI and self-driving. However, he did touch on vehicle deliveries in the coming years in a recent note.
Ives said in a note on October 2:
“While EV demand is expected to fall with the EV tax credit expiration, this was a great bounce-back quarter for TSLA to lay the groundwork for deliveries moving forward, but there is still work to do to gain further ground from a delivery perspective.”
Tesla has some things to figure out before it can truly consider guaranteed stability from a delivery standpoint. Initially, the next two quarters will be a crucial way to determine demand without the $7,500 EV tax credit. It will also begin to figure out if its new affordable models are attractive enough at their current price point to win over consumers.
Investor's Corner
Bank of America raises Tesla PT to $471, citing Robotaxi and Optimus potential
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Bank of America has raised its Tesla (NASDAQ:TSLA) price target by 38% to $471, up from $341 per share.
The firm also kept a Neutral rating on the electric vehicle maker, citing strong progress in autonomy and robotics.
Robotaxi and Optimus momentum
Bank of America analyst Federico Merendi noted that the firm’s price target increase reflects Tesla’s growing potential in its Robotaxi and Optimus programs, among other factors. BofA’s updated valuation is based on a sum-of-the-parts (SOTP) model extending through 2040, which shows the Robotaxi platform accounting for 45% of total value. The model also shows Tesla’s humanoid robot Optimus contributing 19%, and Full Self-Driving (FSD) and the Energy segment adding 17% and 6% respectively.
“Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%,” the Bank of America analyst noted.
Still a Neutral rating
Despite recognizing long-term potential in AI-driven verticals, Merendi’s team maintained a Neutral rating, suggesting that much of the optimism is already priced into Tesla’s valuation.
“Our PO revision is driven by a lower cost of equity capital, better Robotaxi progress, and a higher valuation for Optimus to account for the potential entrance into international markets,” the analyst stated.
Interestingly enough, Tesla’s core automotive business, which contributes the lion’s share of the company’s operations today, represents just 12% of total value in BofA’s model.
Elon Musk
Tesla analyst: ‘near zero chance’ Elon Musk’s $1T comp package is rejected
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
A Tesla analyst says there is “zero chance” that CEO Elon Musk’s new compensation package is rejected, a testament to the loyalty and belief many shareholders and investors have in the frontman.
Tesla investors will vote on November 6 at the annual Shareholder Meeting to approve a new compensation package for Musk, revealed by the company’s Board of Directors earlier this month.
The package, if approved, would give Musk the opportunity to earn $1 trillion in stock, an ownership concentration of over 27 percent (a major request of Musk’s), and a solidified future at the company.
The Tesla Community on X, the social media platform Musk bought in 2023, is overwhelmingly in favor of the pay package, though a handful of skeptics remain.
Nevertheless, the big pulls of this vote are held by proxy firms and other large-scale investors. Two of them, Institutional Shareholder Services (ISS) and Glass Lewis, said they would be voting against Musk’s proposed compensation plan.
Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm
Today, the State Board of Administration of Florida (SBA) said it would vote in favor of Musk’s newly-proposed pay day, making it the first large-scale shareholder to announce it would support the CEO’s pay.
One analyst said that Musk’s payday is inevitable. Gary Black of the Future Fund said today there is a “near-zero chance” that shareholders will allow Musk’s pay package to be rejected:
“There is a near-zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting.”
He added an alternative perspective from Wedbush’s Dan Ives, who said that he had a better chance of starting for the New York Yankees than the comp package not being approved.
There is a near zero chance that $TSLA shareholders will vote down Elon’s new proposed comp plan at the Nov 6 shareholders’ meeting. As Wedbush analyst Dan Ives (@divestech) colorfully put it in a Yahoo Finance interview on October 23rd: “I have a better chance of starting for…
— Gary Black (@garyblack00) October 27, 2025
Black’s the Future Fund sold its Tesla holdings earlier this year. He explained that the firm believed the company’s valuation was too disconnected from fundamentals, citing the P/E ratio of 188x and declining earnings estimates.
The firm maintained its $310 price target, and shares were trading at $356.90 that day.
Shares closed at $452.42 today.
The latest predictions from betting platform Kalshi have shown Musk’s comp package has a 94 percent chance of being approved:
— Kalshi (@Kalshi) October 20, 2025
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