Investor's Corner
Tesla (TSLA) completes $2.7B funding round as BMW pledges more EV competition
Tesla (NASDAQ:TSLA) announced on Wednesday that it had closed its $2.7 billion offering of stock and convertible notes. The electric car maker also noted that it had oversubscribed its funding round, giving the company ample cash as it ramps up Model 3 production and prepares for other high-profile projects like the rollout of the Model Y and the Tesla Semi.
Overall, Tesla sold about $860 million in TSLA stock and $1.84 billion in debt, after the underwriters exercised their option of buying 15% in each offering. Tesla’s filings indicate that its recently-completed funding round was underwritten by Goldman Sachs, Bank of America, Societe Generale, Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, and Wells Fargo.
The completion of Tesla’s latest funding round came just a day after Elon Musk confirmed that he purchased a total of $25 million worth of TSLA stock for $243.00 per share. Musk’s purchase involved 102,880 shares, bringing his total of Tesla stock to 33,927,560 shares, or around 19.5% of the company.
As Tesla prepares to ramp its activities with its new funding, veteran automaker BMW has expressed its intention to put pressure on the electric vehicle market. BMW had a tough first quarter, reporting earnings of $667 million, or down 75% year over year. Despite this, BMW’s management reiterated the company’s commitment to electrification.
BMW noted that the company currently holds 11% of the US luxury market, which is double Tesla’s share, thanks to its lineup of internal combustion-vehicles like the BMW 5-Series (which competes with the Model S), the X5 (which is in the same segment as the Model X), the 3-Series (which competes with the Model 3), and a variety of other models. Tesla only offers three vehicles that compete on the US luxury market, though the electric car maker has noted that the Model S outsells its equivalent BMW competitor by 2-3 times.
-->While BMW commands a larger portion of the US luxury market than Tesla, the German automaker lags behind the Silicon Valley company in terms of EV sales. BMW delivered more than 27,000 electric cars so far in 2019, while Tesla delivered more than 63,000 in the first quarter alone. Nevertheless, BMW notes that its electric vehicle figures will increase as it initiates its “25 by 25” program, which is aimed at rolling out 25 electric and electrified vehicles by 2025.
As the electric vehicle market enters another stage with a freshly-funded Tesla, BMW Chairman Harald Kruger expressed his confidence that the German automaker will remain competitive. “In Europe, our percentage of electrified vehicles delivered is three times the industry average. In 2018, we were the market leader for electrification in both Europe and Germany—not just in the premium segment, but in the market as a whole. We plan to maintain a leading position going forward—both in Europe and worldwide,” he said.
As of writing, Tesla stock is trading +0.93% at $249.37 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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Investor's Corner
Mizuho keeps Tesla (TSLA) “Outperform” rating but lowers price target
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected.
Mizuho analyst Vijay Rakesh lowered Tesla’s (NASDAQ:TSLA) price target to $475 from $485, citing potential 2026 EV subsidy cuts in the U.S. and China that could pressure deliveries. The firm maintained its Outperform rating for the electric vehicle maker, however.
As per the Mizuho analyst, upcoming changes to EV incentives in the U.S. and China could affect Tesla’s unit growth more than previously expected. The U.S. accounted for roughly 37% of Tesla’s third-quarter 2025 sales, while China represented about 34%, making both markets highly sensitive to policy shifts. Potential 50% cuts to Chinese subsidies and reduced U.S. incentives affected the firm’s outlook.
With those pressures factored in, the firm now expects Tesla to deliver 1.75 million vehicles in 2026 and 2 million in 2027, slightly below consensus estimates of 1.82 million and 2.15 million, respectively. The analyst was cautiously optimistic, as near-term pressure from subsidies is there, but the company’s long-term tech roadmap remains very compelling.
Despite the revised target, Mizuho remained optimistic on Tesla’s long-term technology roadmap. The firm highlighted three major growth drivers into 2027: the broader adoption of Full Self-Driving V14, the expansion of Tesla’s Robotaxi service, and the commercialization of Optimus, the company’s humanoid robot.
“We are lowering TSLA Ests/PT to $475 with Potential BEV headwinds in 2026E. We believe into 2026E, US (~37% of TSLA 3Q25 sales) EV subsidy cuts and China (34% of TSLA 3Q25 sales) potential 50% EV subsidy cuts could be a headwind to EV deliveries.
-->“We are now estimating TSLA deliveries for 2026/27E at 1.75M/2.00M (slightly below cons. 1.82M/2.15M). We see some LT drivers with FSD v14 adoption for autonomous, robotaxi launches, and humanoid robots into 2027 driving strength,” the analyst noted.
Tesla stock (NASDAQ: TSLA) has landed an elusive “must own” status from Wall Street firm Melius, according to a new note released early this week.
Analyst Rob Wertheimer said Tesla will lead the charge in world-changing tech, given the company’s focus on self-driving, autonomy, and Robotaxi. In a note to investors, Wertheimer said “the world is about to change, dramatically,” because of the advent of self-driving cars.
He looks at the industry and sees many potential players, but the firm says there will only be one true winner:
“Our point is not that Tesla is at risk, it’s that everybody else is.”
The major argument is that autonomy is nearing a tipping point where years of chipping away at the software and data needed to develop a sound, safe, and effective form of autonomous driving technology turn into an avalanche of progress.
Wertheimer believes autonomy is a $7 trillion sector,” and in the coming years, investors will see “hundreds of billions in value shift to Tesla.”
A lot of the major growth has to do with the all-too-common “butts in seats” strategy, as Wertheimer believes that only a fraction of people in the United States have ridden in a self-driving car. In Tesla’s regard, only “tens of thousands” have tried Tesla’s latest Full Self-Driving (Supervised) version, which is v14.
Tesla Full Self-Driving v14.2 – Full Review, the Good and the Bad
When it reaches a widespread rollout and more people are able to experience Tesla Full Self-Driving v14, he believes “it will shock most people.”
Citing things like Tesla’s massive data pool from its vehicles, as well as its shift to end-to-end neural nets in 2021 and 2022, as well as the upcoming AI5 chip, which will be put into a handful of vehicles next year, but will reach a wider rollout in 2027, Melius believes many investors are not aware of the pace of advancement in self-driving.
Tesla’s lead in its self-driving efforts is expanding, Wertheimer says. The company is making strategic choices on everything from hardware to software, manufacturing, and overall vehicle design. He says Tesla has left legacy automakers struggling to keep pace as they still rely on outdated architectures and fragmented supplier systems.
Tesla shares are up over 6 percent at 10:40 a.m. on the East Coast, trading at around $416.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
-->Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
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