

Investor's Corner
Tesla ‘must see stabilization’ in auto business, but analyst believes other strengths overlooked
Tesla (NASDAQ: TSLA) must see a stabilization in the negative earnings revisions within the auto business first,” but Morgan Stanley analyst Adam Jonas believes other “booming” portions of its business are being overlooked after the Q2 Earnings Call earlier this week.
Jonas reiterated Morgan Stanley’s $310 price target and its ‘Overweight’ rating in a note to investors today.
Tesla shares fell drastically the day after Earnings as the company missed EPS expectations from Wall Street. The automaker beat revenue expectations.
However, even bullish analysts are seeing a need for the automotive business to stabilize as it fights margins and grow vehicle deliveries over the next few years:
“We believe Tesla has significant attributes to be valued as an AI beneficiary, but the company must see a stabilization in the negative earnings revisions within the auto business first. We do not believe Tesla will get credit as an AI company as long as core auto earnings are being revised down. This process may take a few more quarters to see through.”
Tesla said earlier this year that it expects a “notably lower growth rate” due to the development of the next-gen platform and focus on Robotaxi and Full Self-Driving (FSD).
It also said that it expects to begin production of these next-gen models, including affordable EVs, sometime in the first half of 2025.
However, Jonas believes there should be some hesitancy for Tesla investors as near-term impact will likely be negative:
“Our thesis on Tesla is that it is both an auto stock + an energy, AI/robotics company. In fact, our valuation of the core auto business ($59/share) represents just 19% of our $310 price target. 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.”
It is no secret that many Tesla investors seem to be in the long-term play, so the short-term issues will not matter much to the “diamond hands” shareholders.
With that being said, Jonas believes auto-related business aspects will help the stock climb back upward toward its $310 price target:
“…we believe investors should not ignore the continued developments of Tesla’s other plays, many of which are auto-related (i.e. the recurring revenue opportunity from the Tesla fleet — embedded in our Tesla Network Services valuation) and other areas that we do not include within our $310 price target but that the market may inclue (i.e. Energy Storage, Optimus).”
Tesla is trading at around $222 today.
I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.
Investor's Corner
Tesla could save $2.5B by replacing 10% of staff with Optimus: Morgan Stanley
Jonas assigned each robot a net present value (NPV) of $200,000.

Tesla’s (NASDAQ:TSLA) near-term outlook may be clouded by political controversies and regulatory headwinds, but Morgan Stanley analyst Adam Jonas sees a glimmer of opportunity for the electric vehicle maker.
In a new note, the Morgan Stanley analyst estimated that Tesla could save $2.5 billion by replacing just 10% of its workforce with its Optimus robots, assigning each robot a net present value (NPV) of $200,000.
Morgan Stanley highlights Optimus’ savings potential
Jonas highlighted the potential savings on Tesla’s workforce of 125,665 employees in his note, suggesting that the utilization of Optimus robots could significantly reduce labor costs. The analyst’s note arrived shortly after Tesla reported Q2 2025 deliveries of 384,122 vehicles, which came close to Morgan Stanley’s estimate and slightly under the consensus of 385,086.
“Tesla has 125,665 employees worldwide (year-end 2024). On our calculations, a 10% substitution to humanoid at approximately ($200k NPV/humanoid) could be worth approximately $2.5bn,” Jonas wrote, as noted by Street Insider.
Jonas also issued some caution on Tesla Energy, whose battery storage deployments were flat year over year at 9.6 GWh. Morgan Stanley had expected Tesla Energy to post battery storage deployments of 14 GWh in the second quarter.
Musk’s political ambitions
The backdrop to Jonas’ note included Elon Musk’s involvement in U.S. politics. The Tesla CEO recently floated the idea of launching a new political party, following a poll on X that showed support for the idea. Though a widely circulated FEC filing was labeled false by Musk, the CEO does seem intent on establishing a third political party in the United States.
Jonas cautioned that Musk’s political efforts could divert attention and resources from Tesla’s core operations, adding near-term pressure on TSLA stock. “We believe investors should be prepared for further devotion of resources (financial, time/attention) in the direction of Mr. Musk’s political priorities which may add further near-term pressure to TSLA shares,” Jonas stated.
Investor's Corner
Two Tesla bulls share differing insights on Elon Musk, the Board, and politics
Two noted Tesla bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.

Two noted Tesla (NASDAQ:TSLA) bulls have shared differing views on the recent activities of CEO Elon Musk and the company’s leadership.
While Wedbush analyst Dan Ives called on Tesla’s board to take concrete steps to ensure Musk remains focused on the EV maker, longtime Tesla supporter Cathie Wood of Ark Invest reaffirmed her confidence in the CEO and the company’s leadership.
Ives warns of distraction risk amid crucial growth phase
In a recent note, Ives stated that Tesla is at a critical point in its history, as the company is transitioning from an EV maker towards an entity that is more focused on autonomous driving and robotics. He then noted that the Board of Directors should “act now” and establish formal boundaries around Musk’s political activities, which could be a headwind on TSLA stock.
Ives laid out a three-point plan that he believes could ensure that the electric vehicle maker is led with proper leadership until the end of the decade. First off, the analyst noted that a new “incentive-driven pay package for Musk as CEO that increases his ownership of Tesla up to ~25% voting power” is necessary. He also stated that the Board should establish clear guidelines for how much time Musk must devote to Tesla operations in order to receive his compensation, and a dedicated oversight committee must be formed to monitor the CEO’s political activities.
Ives, however, highlighted that Tesla should move forward with Musk at its helm. “We urge the Board to act now and move the Tesla story forward with Musk as CEO,” he wrote, reiterating its Outperform rating on Tesla stock and $500 per share price target.
Tesla CEO Elon Musk has responded to Ives’ suggestions with a brief comment on X. “Shut up, Dan,” Musk wrote.
Cathie Wood reiterates trust in Musk and Tesla board
Meanwhile, Ark Investment Management founder Cathie Wood expressed little concern over Musk’s latest controversies. In an interview with Bloomberg Television, Wood said, “We do trust the board and the board’s instincts here and we stay out of politics.” She also noted that Ark has navigated Musk-related headlines since it first invested in Tesla.
Wood also pointed to Musk’s recent move to oversee Tesla’s sales operations in the U.S. and Europe as evidence of his renewed focus in the electric vehicle maker. “When he puts his mind on something, he usually gets the job done,” she said. “So I think he’s much less distracted now than he was, let’s say, in the White House 24/7,” she said.
TSLA stock is down roughly 25% year-to-date but has gained about 19% over the past 12 months, as noted in a StocksTwits report.
Investor's Corner
Cantor Fitzgerald maintains Tesla (TSLA) ‘Overweight’ rating amid Q2 2025 deliveries
Cantor Fitzgerald is holding firm on its bullish stance for the electric vehicle maker.

Cantor Fitzgerald is holding firm on its bullish stance for Tesla (NASDAQ: TSLA), reiterating its “Overweight” rating and $355 price target amidst the company’s release of its Q2 2025 vehicle delivery and production report.
Tesla delivered 384,122 vehicles in Q2 2025, falling below last year’s Q2 figure of 443,956 units. Despite softer demand in some countries in Europe and ongoing controversies surrounding CEO Elon Musk, the firm maintained its view that Tesla is a long-term growth story in the EV sector.
Tesla’s Q2 results
Among the 384,122 vehicles that Tesla delivered in the second quarter, 373,728 were Model 3 and Model Y. The remaining 10,394 units were attributed to the Model S, Model X, and Cybertruck. Production was largely flat year-over-year at 410,244 units.
In the energy division, Tesla deployed 9.6 GWh of energy storage in Q2, which was above last year’s 9.4 GWh. Overall, Tesla continues to hold a strong position with $95.7 billion in trailing twelve-month revenue and a 17.7% gross margin, as noted in a report from Investing.com.
Tesla’s stock is still volatile
Tesla’s market cap fell to $941 billion on Monday amid volatility that was likely caused in no small part by CEO Elon Musk’s political posts on X over the weekend. Musk has announced that he is forming the America Party to serve as a third option for voters in the United States, a decision that has earned the ire of U.S. President Donald Trump.
Despite Musk’s controversial nature, some analysts remain bullish on TSLA stock. Apart from Cantor Fitzgerald, Canaccord Genuity also reiterated its “Buy” rating on Tesla shares, with the firm highlighting the company’s positive Q2 vehicle deliveries, which exceeded its expectations by 24,000 units. Cannacord also noted that Tesla remains strong in several markets despite its year-over-year decline in deliveries.
-
News1 day ago
Tesla exec hints at useful and potentially killer Model Y L feature
-
Elon Musk1 day ago
Waymo responds to Tesla’s Robotaxi expansion in Austin with bold statement
-
Elon Musk2 days ago
Elon Musk reveals SpaceX’s target for Starship’s 10th launch
-
Elon Musk3 days ago
Tesla ups Robotaxi fare price to another comical figure with service area expansion
-
News1 day ago
Tesla’s longer Model Y did not scale back requests for this vehicle type from fans
-
News1 day ago
“Worthy of respect:” Six-seat Model Y L acknowledged by Tesla China’s biggest rivals
-
News2 days ago
First glimpse of Tesla Model Y with six seats and extended wheelbase
-
Elon Musk2 days ago
Elon Musk confirms Tesla is already rolling out a new feature for in-car Grok