Investor's Corner
What the Tesla Model 3 Means for the Planet’s Future
Tesla CEO Elon Musk’s overarching goal of converting the world from using fossil fuel powered cars to electric vehicles is coming to fruition. Or so it would seem after the company has secured nearly 300,000 reservations on its upcoming mass-market Model 3.
But is the world really on the cusp of a green car revolution? According to the Washington Post, our enthusiasm should be tempered with a healthy dollop of reality. “Even if Tesla manages to scale up and hit its very aggressive target of 500,000 vehicles a year by 2020, that would still represent only about .5 percent of global light-duty vehicle sales,” said Colin McKerracher, head of advanced transport at Bloomberg New Energy Finance. “So it’s hard to have an overall impact from them alone.”
The U.N.’s Intergovernmental Panel on Climate Change estimates that greenhouse gas emissions from transportation transportation total 7 billion tons annually. That number is projected to rise to 12 billion tons by 2050 in the absence of any significant policy shifts. Several experts suggested this week that booming sales of Tesla automobiles won’t have a significant impact on the global vehicle market.
Today, global sales of light duty vehicles are a staggering 88.5 million a year according to Navigant Research. That number is expected to grow dramatically as sales in India and Asia skyrocket in the years ahead. In comparison, 500,000 Teslas are just the proverbial drop in the bucket.
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The real question is what effect the success of the Model 3 will have on global cultural norms and other manufacturers. “It’s obviously important for Tesla, but I think it’s going to push other automakers to match what Tesla’s doing, and also get other people to think about switching to electric,” said David Reichmuth, a senior engineer in the clean vehicles program at the Union of Concerned Scientists.
Bloomberg New Energy Finance predicts electric vehicles sales will total less than 5% of total global sales until 2022. After that, falling battery prices will finally make electric cars truly price competitive with conventional cars. Bloomberg thinks it will be 2040 before the number of electric cars sold each year gets really impressive. By then, 35% of cars will be electric and EVs will comprise 25% of the cars in the world.
Regulatory and cultural changes will have a large effect on how rapidly the world decarbonizes the transportation sector. In China, government policies strongly favor electric cars. As a result, sales of so-called "new energy vehicles" -- which include hybrids, plug-in hybrids, and battery electric cars -- are expected to triple this year and continue to expand rapidly in the years to follow. Those policies will alter the Chinese culture. Electric cars will likely be preferred over conventional cars in China within a few years.
Tesla Model X Signature Red offered on Tesla China website (left). Tesla Model S in Chinese showroom (right) [Source: Tesla Motors]
Autonomous cars could also dramatically reduce transportation emissions.That's according to a study by Jeffrey Greenblatt and Samveg Saxena of the Lawrence Berkeley National Laboratory. Tesla obviously is positioning the Model 3 to feature advanced autonomous driving features when it goes into production.
Just like wind and solar power, electric cars may enjoy a period of very rapid growth, but that in and of itself will not solve the world's carbon emissions problem. Will people look back on the introduction of the Model 3 as the "tipping point" when the balance between internal combustion engines and batteries began to shift? Quite possibly. Certainly Tesla is raising awareness about electric cars and forcing other car makers to invest in battery and autonomous technology.
But there could be a long way to go before the people on earth can say they have conquered their carbon emissions problem. A rhetorician would argue that Tesla is doing what's necessary to promote change but not sufficient to make that change complete.
Feature photo credit: Tesla Motors
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
Tesla (NASDAQ: TSLA) stock received a price target update from Pierre Ferragu of Wall Street firm New Street Research, citing the company’s growing lead in self-driving and autonomy.
On Tuesday, Ferragu bumped his price target from $520 to $600, stating that the consensus from the Consumer Electronics Show in Las Vegas was that Tesla’s lead in autonomy has been sustained, is growing, and sits at a multiple-year lead over its competitors.
CES 2026 validates Tesla’s FSD strategy, but there’s a big lag for rivals: analyst
“The signal from Vegas is loud and clear,” the analyst writes. “The industry isn’t catching up to Tesla; it is actively validating Tesla’s strategy…just with a 12-year lag.”
The note shows that the company’s prowess in vehicle autonomy is being solidified by lagging competitors that claim to have the best method. The only problem is that Tesla’s Vision-based approach, which it adopted back in 2022 with the Model 3 and Model Y initially, has been proven to be more effective than competitors’ approach, which utilizes other technology, such as LiDAR and sensors.
Currently, Tesla shares are sitting at around $433, as the company’s stock price closed at $432.96 on Tuesday afternoon.
Ferragu’s consensus on Tesla shares echoes that of other Wall Street analysts who are bullish on the company’s stock and position within the AI, autonomy, and robotics sector.
Dan Ives of Wedbush wrote in a note in mid-December that he anticipates Tesla having a massive 2026, and could reach a $3 trillion valuation this year, especially with the “AI chapter” taking hold of the narrative at the company.
Ives also said that the big step in the right direction for Tesla will be initiating production of the Cybercab, as well as expanding on the Robotaxi program through the next 12 months:
“…as full-scale volume production begins with the autonomous and robotics roadmap…The company has started to test the all-important Cybercab in Austin over the past few weeks, which is an incremental step towards launching in 2026 with important volume production of Cybercabs starting in April/May, which remains the golden goose in unlocking TSLA’s AI valuation.”
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Tesla has transitioned from an automaker to a full-fledged AI company, and its Robotaxi and Cybercab programs, fueled by the Full Self-Driving suite, are leading the charge moving forward. In 2026, there are major goals the company has outlined. The first is removing Safety Drivers from vehicles in Austin, Texas, one of the areas where it operates a ride-hailing service within the U.S.
Ultimately, Tesla will aim to launch a Level 5 autonomy suite to the public in the coming years.
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