Investor's Corner
Tesla price target cut by Morgan Stanley
Tesla’s (NASDAQ: TSLA) price target was cut by Morgan Stanley, a firm that has had a bullish outlook on the automaker’s stock for several years.
In a new note to investors released this morning, Morgan Stanley analyst Adam Jonas reduced the firm’s price target to $320 from $345, with the main thesis of the writing being concerned with EV demand.
“EV demand continues to decelerate despite continued price cuts,” Jonas wrote. “Fleets are dumping EVs and strong hybrid momentum is competing for the marginal EV buyer. Could Tesla lose money (sometime) this year?”
Jonas makes several points throughout the note, including Tesla’s aging product lineup, oversupply in key markets, and increasing demand for hybrids.
Tesla’s Aging Product Lineup
We have discussed this point of view in the past, and it’s hard to agree with it. While Tesla has had the same four vehicles in its lineup for several years now, the automaker has done nothing different than any other automaker in terms of refreshing and introducing new designs.
In the past, we’ve discussed how the Honda Civic has gone through generational changes every 4-7 years. Tesla has made routine changes to the Model S and Model X in that same timeframe, the Model Y is only a few years old and rumoredly in the process of a refresh with Project Juniper, and the Model 3 just received a complete overhaul via the Highland refresh.
Not to mention, the Cybertruck has been on the market for less than six months.
“Aging” is a tough word to use in order to describe this lineup correctly. It is hard to even consider it stale. While Tesla is working with a vehicle lineup that has been around for a few years, updates and refreshes are happening regularly.
Jonas mentions that Tesla’s lineup “may be the oldest of any major OEM,” but with the Cybertruck just launching and Model 3 just recently getting an in-depth overhaul, it is difficult to agree.
Oversupply in Key Markets
Jonas specifically mentions China here, and for good reason. Tesla is still very popular in China, but there are simply more affordable options, and consumers may not be able to justify spending three or four times the money.
In order to get back to its competitiveness, Tesla will need to launch a vehicle at this sort of price point, which would fall between $15,000 and $25,000.
What is going on in China is something Tesla could encounter in the United States in 5-10 years. Eventually, more companies will have EVs out there, and not everyone will want to pay a premium. Of course, Tesla plans to launch the next-gen platform sometime in 2025, so it is also a possibility that the company completely averts this situation in North America.
Hybrid Demand Increases
Hybrid sales increased five times faster than EVs last month, Jonas writes in the note. Some consumers may look at the best of both worlds for their next car, and hybrids may fit the bill of what they want. As someone who drove a Ford Escape Hybrid for seven years, it offered a lot of positives, including better fuel economy than the same model in an ICE version.
Jonas believes that Toyota will outpace any major automaker in the U.S. this year in terms of growth due to its focus on hybrid powertrains.
Price Target
Jonas reduced Tesla’s price target to $320 from $345.
“Our thesis on Tesla is that it is both an auto stock + an energy, AI/robotics company … Negative developments in the global EV market very much matter to Tesla and should reasonably have a negative near-term impact on the price of the stock. At the same time, however, we believe investors should not ignore the continued developments of tesla’s other plays,” Jonas writes.
While the firm reduced its price target to $320, it also believes that Tesla will not “get credit as an AI company as long as core auto earnings are being revised down.”
This makes it seem like the “$100 bear case may be in play,” Jonas said.
Disclosure: Joey Klender owns Tesla stock.
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Investor's Corner
Tesla Full Self-Driving statistic impresses Wall Street firm: ‘Very close to unsupervised’
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Tesla Full Self-Driving performance and statistics continue to impress everyone, from retail investors to Wall Street firms. However, one analyst believes Tesla’s driving suite is “very close” to achieving unsupervised self-driving.
On Tuesday, Piper Sandler analyst Alexander Potter said that Tesla’s recent launch of Full Self-Driving version 14 increased the number of miles traveled between interventions by a drastic margin, based on data compiled by a Full Self-Driving Community Tracker.
🚨 Piper Sandler reiterated its Overweight rating and $500 PT on Tesla $TSLA stock
Analyst Alexander Potter said FSD is near full autonomy and latest versions showed the largest improvement in disengagements, from 440 miles to 9,200 miles between critical interventions pic.twitter.com/u4WCLfZcA9
— TESLARATI (@Teslarati) December 9, 2025
The data shows there was a significant jump in miles traveled between interventions as Tesla transitioned drivers to v14.1 back in October. The FSD Community Tracker saw a jump from 441 miles to over 9,200 miles, the most significant improvement in four years.
Interestingly, there was a slight dip in the miles traveled between interventions with the release of v14.2. Piper Sandler said investor interest in FSD has increased.
Full Self-Driving has displayed several improvements with v14, including the introduction of Arrival Options that allow specific parking situations to be chosen by the driver prior to arriving at the destination. Owners can choose from Street Parking, Parking Garages, Parking Lots, Chargers, and Driveways.
Additionally, the overall improvements in performance from v13 have been evident through smoother operation, fewer mistakes during routine operation, and a more refined decision-making process.
Early versions of v14 exhibited stuttering and brake stabbing, but Tesla did a great job of confronting the issue and eliminating it altogether with the release of v14.2.
Tesla CEO Elon Musk also recently stated that the current v14.2 FSD suite is also less restrictive with drivers looking at their phones, which has caused some controversy within the community.
Although we tested it and found there were fewer nudges by the driver monitoring system to push eyes back to the road, we still would not recommend it due to laws and regulations.
Tesla Full Self-Driving v14.2.1 texting and driving: we tested it
With that being said, FSD is improving significantly with each larger rollout, and Musk believes the final piece of the puzzle will be unveiled with FSD v14.3, which could come later this year or early in 2026.
Piper Sandler reaffirmed its $500 price target on Tesla shares, as well as its ‘Overweight’ rating.
Tesla received a price target boost from Morgan Stanley, according to a new note on Monday morning, but there is some considerable caution also being communicated over the next year or so.
Morgan Stanley analyst Andrew Percoco took over Tesla coverage for the firm from longtime bull Adam Jonas, who appears to be focusing on embodied AI stocks and no longer automotive.
Percoco took over and immediately adjusted the price target for Tesla from $410 to $425, and changed its rating on shares from ‘Overweight’ to ‘Equal Weight.’
Percoco said he believes Tesla is the leading company in terms of electric vehicles, manufacturing, renewable energy, and real-world AI, so it deserves a premium valuation. However, he admits the high expectations for the company could provide for a “choppy trading environment” for the next year.
He wrote:
“However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels.”
Percoco also added that if market cap hurdles are achieved, Morgan Stanley would reduce its price target by 7 percent.
Perhaps the biggest change with Percoco taking over the analysis for Jonas is how he will determine the value of each individual project. For example, he believes Optimus is worth about $60 per share of equity value.
He went on to describe the potential value of Full Self-Driving, highlighting its importance to the Tesla valuation:
“Full Self Driving (FSD) is the crown jewel of Tesla’s auto business; we believe that its leading-edge personal autonomous driving offering is a real game changer, and will remain a significant competitive advantage over its EV and non-EV peers. As Tesla continues to improve its platform with increased levels of autonomy (i.e., hands-off, eyes-off), it will revolutionize the personal driving experience. It remains to be seen if others will be able to keep pace.”
Additionally, Percoco outlined both bear and bull cases for the stock. He believes $860 per share, “which could be in play in the next 12 months if Tesla manages through the EV-downturn,” while also scaling Robotaxi, executing on unsupervised FSD, and scaling Optimus, is in play for the bull case.
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Meanwhile, the bear case is placed at $145 per share, and “assumes greater competition and margin pressure across all business lines, embedding zero value for humanoids, slowing the growth curve for Tesla’s robotaxi fleet to reflect regulatory challenges in scaling a vision-only perception stack, and lowering market share and margin profile for the autos and energy businesses.”
Currently, Tesla shares are trading at around $441.
Tesla bear Michael Burry got blunt with his beliefs over the company’s valuation, which he called “ridiculously overvalued” in a newsletter to subscribers this past weekend.
“Tesla’s market capitalization is ridiculously overvalued today and has been for a good long time,” Burry, who was the inspiration for the movie The Big Short, and was portrayed by Christian Bale.
Burry went on to say, “As an aside, the Elon cult was all-in on electric cars until competition showed up, then all-in on autonomous driving until competition showed up, and now is all-in on robots — until competition shows up.”
Tesla bear Michael Burry ditches bet against $TSLA, says ‘media inflated’ the situation
For a long time, Burry has been skeptical of Tesla, its stock, and its CEO, Elon Musk, even placing a $530 million bet against shares several years ago. Eventually, Burry’s short position extended to other supporters of the company, including ARK Invest.
Tesla has long drawn skepticism from investors and more traditional analysts, who believe its valuation is overblown. However, the company is not traded as a traditional stock, something that other Wall Street firms have recognized.
While many believe the company has some serious pull as an automaker, an identity that helped it reach the valuation it has, Tesla has more than transformed into a robotics, AI, and self-driving play, pulling itself into the realm of some of the most recognizable stocks in tech.
Burry’s Scion Asset Management has put its money where its mouth is against Tesla stock on several occasions, but the firm has not yielded positive results, as shares have increased in value since 2020 by over 115 percent. The firm closed in May.
In 2020, it launched its short position, but by October 2021, it had ditched that position.
Tesla has had a tumultuous year on Wall Street, dipping significantly to around the $220 mark at one point. However, it rebounded significantly in September, climbing back up to the $400 region, as it currently trades at around $430.
It closed at $430.14 on Monday.
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