Investor's Corner
Tesla’s Autopilot probe worries Morgan Stanley with ‘reputational risks’
The recently launched Tesla Autopilot probe by the NHTSA is said to be a greater threat to the automaker’s reputation than its financial situation, according to a new note from Morgan Stanley. Headed by analyst Adam Jonas, the note outlines the potential risks that Tesla could face with the probe, which intends to investigate 11 instances of Autopilot-equipped cars crashing into emergency vehicles, according to the documents.
The note outlines four potential risk factors that Tesla could face in a long and drawn-out battle to clear its name of any wrongdoing. In the initial years of autonomous driving development, nearly any instance of a vehicle being involved in an accident has increased skepticism over the potential of future self-driving cars. While Tesla Autopilot only operates on Level 2 autonomy, with Level 5 being a fully operational self-driving machine, the company admittedly states that drivers should still remain alert while the vehicle is in operation, never taking their eyes off the road.
However, this is not the instance for every driver. While Autopilot vehicles from Tesla were involved in accidents on a significantly less-frequent occasion than the national average based on NHTSA statistics, Tesla vehicles involved in accidents seem to catch more media attention than any other instance on the road. After all, we don’t hear about every Chevy Malibu or Ford F-150 crash that occurs, but the false narrative that Teslas drive themselves still floats around in the form of catchy headlines or misleading articles.
The chance for reputational risks is one of the most notable points of the Morgan Stanley note and is the point that the analysts expand on the most. “Vehicle safety actions and recalls (both voluntary and involuntary) are a fact of life in the auto industry, despite cars achieving greater capability and quality over time. While we are not making any changes to our Tesla model and price target at this time, the NHTSA serves as a reminder to investors about the importance of vehicle safety as we turn over greater portions of driving to software in a network,” the note said.
A Tesla Model 3 on Autopilot. [Credit: LivingTesla/YouTube]
Of course, semi-autonomous vehicles, and autonomy in general for automotive, is a young and relatively new feature in the world of cars. There are bound to be mistakes and incidents just as there were with early vehicles. Accidents happen, but the early adopters of motor vehicles did not give up on the task of making them better and safer, and that’s precisely what will happen as more companies take a crack at the potential autonomous driving sector.
“The regulatory, legal, and moral/ethical nuances are difficult, if not impossible, to model. As human driving transitions to computer driving, accident frequency is expected to decline by 90% or more (some experts insist accident frequency must ultimately fall by greater than 99.9%). At the same time, accident ‘fault’ transitions from someone to something,” the note also states. “Just our view, but there is no moral equivalency between a ‘human-caused’ traffic fatality and a ‘system-caused’ traffic fatality. Over time, we believe the industry should be in position to provide vehicle data for 3rd party validation to prove the significant societal/health and safety benefits of autonomy.
Morgan Stanley on the NHTSA probe ??$TSLA pic.twitter.com/wF9r2fuMsq
— David Tayar (@davidtayar5) August 18, 2021
As noted yesterday in an interview with former Ford CEO Mark Fields, the NHTSA study into Tesla could take up to 18 months. Morgan Stanley reiterates this point in its note, especially with Autopilot’s “high profile nature.” Unfortunately, Tesla’s flashy name and mainstream personality as an automaker, especially a revolutionary one, has put them at center stage for this kind of attention. Those with a reasonable platform may not understand all of the functionalities or safety precautions of Autopilot’s nature. Still, unfortunately, many of the accidents are being described as the software’s fault, although many of the instances are actually driver errors.
At the time of writing, TSLA stock was trading at $689.79, up over 3.6%.
Disclosure: Joey Klender is a TSLA Shareholder.
Tesla has its answer to grow its automotive sales over the next few years, TD Cowen analyst Itay Michaeli says, but it just has to bring it to the U.S.
On Thursday, Michaeli reiterated his $490 price target and the ‘Buy’ rating he already held on Tesla stock (NASDAQ: TSLA). However, its automotive division has struggled to show sequential growth over the past few years, mostly due to its focus on AI and Full Self-Driving. Tesla already axed two of its lower-volume vehicles with the Model S and Model X earlier this year.
However, Tesla does not need to engineer an entire new vehicle to trigger an upward tick in sales; it just has to bring it from China to the U.S., Michaeli said.
He is talking about the Model Y L, a slightly larger version of the all-electric crossover that is already available in China. U.S. customers have been pleading with CEO Elon Musk to bring it to the country since its launch in Asia last year, but he’s not convinced of it because of the advent of self-driving and its importance in this particular market.
The problem is that Tesla owners have been requesting something larger that could fit a typical American family. The Model Y L is slightly larger than the standard Model Y, but some are concerned that it could still be too small to fit what most people might need.
Instead, they have asked for a full-size SUV from Tesla.
Tesla gives big hint that it will build Cyber SUV, smaller Cybertruck
Nevertheless, the Model Y L still presents a great opportunity for Tesla in the U.S., and Michaeli says that there is an additional sales opportunity of about 100,000 units, with demand potential falling somewhere between 60,000 and 135,000 units.
TD Cowen’s note to investors also analyzed that Tesla’s growth could come from a stock perspective as well, positively impacting the stock price, as it has been widely reliant on vehicle sales, even though Tesla has truly phased itself away from that being an important metric.
Tesla stands to gain greatly from the introduction of the Model Y L in the U.S., but only if Elon Musk sees it as a viable fit for the market. Families may need to see Tesla bring something larger to the U.S., or they might be forced to buy from another automaker that offers something that fits is needs for more interior space to haul around the kids.
Elon Musk
SpaceXAI just launched into your kitchen with their new app
SpaceXAI just powered its first consumer app and it predicts what you want to buy.
SpaceXAI just made its first move into consumer AI, and it involves your grocery cart. On June 3, 2026, Gopuff and SpaceXAI announced the launch of Go, a Grok-powered shopping assistant built directly into the Gopuff app that predicts what you need before you even start searching for it.
Gopuff is an instant delivery platform that operates more than 400 micro-fulfillment centers across the U.S., delivering everyday essentials, snacks, drinks, and household items in as little as 15 minutes. It is not a restaurant delivery app or a marketplace. It owns its inventory, controls its warehouses, and handles its own logistics, which means it has built one of the most detailed consumer behavior datasets in retail over its 13-year history.
Go combines SpaceXAI’s advanced reasoning, voice, and image generation models with Gopuff’s dataset of hundreds of millions of orders and real-time cultural signals from X to prepare a suggested cart the moment a customer opens the app. It learns each shopper’s habits and automatically builds a personalized cart based on time of day, location, order history, and real-time indicators. Returning customers can check out with a single tap.
Rather than searching for specific items, users can describe a situation like a game-day party or the desire for a healthy breakfast and Go will assemble a cart automatically. It can also predict when shoppers are running low on items like coffee or paper towels and have them packed and delivered in under 15 minutes. Grok voice integration lets users talk to the app in plain conversational language and check out completely hands-free.
Gopuff co-founder and co-CEO Yakir Gola said: “Today, we believe the greatest friction left in commerce is not delivery or instantaneous access to the essentials customers need. It’s the moment before: the thinking, the deciding, the remembering. We’re combining Gopuff’s demand intelligence with xAI’s frontier reasoning to create an everyday shopping experience that feels like a true extension of you.”
Why SpaceX just made a $60 billion bet on AI coding ahead of historic IPO
The timing carries context beyond the product launch. SpaceXAI was formed after SpaceX completed an all-stock merger with Elon Musk’s xAI earlier this year, folding one of the most advanced AI labs in the world into the same corporate structure as the company preparing what could be the largest IPO in history. SpaceXAI is dipping into consumer-focused AI just as it prepares for its public debut, and while Musk has openly discussed building an everything app, this launch uses Grok to power another company’s product rather than launching a standalone consumer platform. Every consumer-facing deployment of Grok ahead of the IPO roadshow adds tangible evidence that SpaceXAI is not just an infrastructure play but a direct competitor in the AI application layer where OpenAI and Google are already fighting for dominance.
Elon Musk
SpaceX’s amended S-1 is sparking a major Tesla merger conversation
A single line in SpaceX’s amended S-1 just sent Tesla stock down 5% in one day.
A single line buried in SpaceX’s amended S-1 filing is doing more to move Tesla’s stock price than anything Tesla itself has announced in months. The clause, disclosed as SpaceX prepares for what could be the largest IPO in Wall Street history, states that the company “may issue a significant amount of equity in connection with future transactions.” While this may be seen as boilerplate language in S-1 filings, the historical ties between SpaceX and Tesla, and with Elon Musk reportedly discussing a possible merger with close colleagues, investors are interpreting it as something closer to a signal.
The concern among institutional investors like Gary Black, managing director of The Future Fund, pointed directly to the amended filing on X, saying it “strongly suggests more SPCX equity will be issued,” which could potentially be used to acquire Tesla. He estimated such a deal could be 28% dilutive to Tesla shareholders since SpaceX would likely command a significantly higher valuation multiple. Black added that institutional investors he knows hate the idea of a combination because they prefer pure plays over conglomerates, which he said “nearly always gravitate to the lowest common multiple.”
The Tesla and SpaceX merger everyone is talking about is quietly building
The bull case runs the math differently. Tesla influencer and retail shareholder advocate AleXandra Merz pushed back on what she called a widespread misunderstanding of how merger-of-equals deals actually work. Rather than simply splitting the difference between two market caps, a merger exchange ratio is negotiated based on relative fair market values, meaning the lower valued company typically sees its stock reprice upward toward the deal value.
Under her model, SpaceX enters at a $2.5 trillion valuation and Tesla at $1.6 trillion, producing a combined entity worth $4.1 trillion split evenly between both shareholder groups. That implies Tesla’s side of the deal would be valued at $2.05 trillion, a gain of roughly $450 billion from its current market cap. She cited Dow-DuPont and CBS-Viacom as historical examples of how markets reprice both companies toward the announced exchange ratio after a deal is unveiled.
What does a Merger of Equals mean to Elon’s compensation packages?
Well, it changes everything.
Enjoy https://t.co/uekCldyITw pic.twitter.com/kolq1C9qTu
— AleXandra Merz 🇺🇲 (@TeslaBoomerMama) June 1, 2026
The SpaceX S-1 amendments also revealed just how much financial infrastructure already binds the two companies together. As Teslarati has reported, SpaceX purchased $697 million in Tesla Megapacks, $131 million in Cybertrucks, and the two companies have shared supply chain resources, and semiconductor fabrication plans since well before any merger conversation became public. A retail poll by Tesla influencer Sawyer Merritt is finding that 36% of respondents do not plan to buy SpaceX shares at IPO and 15.3% saying their decision depends on the valuation.
Do you plan on buying @SpaceX stock at its IPO?
— Sawyer Merritt (@SawyerMerritt) June 1, 2026
Whether the merger happens or not, the amended filing is seemingly moving markets and sharpened a debate that is no longer theoretical. SpaceX is weeks away from trading publicly, and Tesla shareholders are now watching every word of every filing for clues about what Musk plans to do next.
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