Investor's Corner
Tesla’s growth story continues in manufacturing and not autonomy: Morgan Stanley
Tesla’s (NASDAQ: TSLA) growth story has leaned on the potential of autonomous, self-driving vehicles revolutionizing the way everyday transportation is performed. While Tesla has developed its Autopilot and Full Self-Driving suites with relative success in the past several years, Morgan Stanley analysts are not convinced that autonomous driving programs will continue to fuel the automaker’s growth story and continuing expansion. Instead, Tesla’s bread and butter, which is vehicle manufacturing, along with other strengths like material sourcing, supply chain, and infrastructure development, is where the financial firm is putting its money.
It is no secret Tesla has fallen short with its FSD and Robotaxi plans, as CEO Elon Musk has predicted since 2018 that the automaker would complete its venture into fully-autonomous vehicles. However, each year has gone by with a new set of challenges, whether they would be based on manufacturing or the supply of necessary parts, further delaying the rollout of a “feature complete” FSD suite or a rollout of the planned Robotaxi fleet. This has led to some skepticism about whether the electric car company will really continue its monumental pace of growth through that medium, and not another, which Tesla has already proven to be well-versed in: manufacturing.
Tesla manufacturing prowess, stock split plans indicate ‘massive position of strength:’ Wedbush
A new note to investors from Adam Jonas and other analysts at Morgan Stanley seems to indicate the latter, that Tesla’s true road to continuing expansion and increased valuations is a focus on what it does best. For the past several years, Tesla has focused intently on increasing manufacturing efficiency and accuracy, and it has ultimately led to a streak of nine consecutive quarters of growth in vehicle deliveries. While that streak may be in jeopardy due to the shutdowns of its most-productive factory, which is in Shanghai, there is still evidence to suggest that Tesla’s best way to continue growing is through its production prowess.
“With respect to Tesla, we think attributes like AI, autonomous, and EV are fully, if not over-appreciated here,” the analysts wrote in their note. “In fact, we believe Tesla’s more ‘gritty’ capabilities in terms of manufacturing, material sourcing, supply chain, and infrastructure will drive the next leg of growth to the story.”
Tesla will trade with increased volatility in the coming weeks and months, Morgan Stanley predicted in the new note. The company’s focus on its autonomy may be dragging down expectations for the stock, as Tesla continues to push its belief that FSD and Level 4 to Level 5 autonomy will be arriving by the end of the year. The analysts see this as a major issue in Tesla’s outlook moving forward:
“Firstly, we think the core auto margin is too high at this point, as it does not fully reflect input cost inflation. Secondly, we believe expectations of full autonomy or FSD ‘flipping’ into a major near-term margin boost are overestimated. In fact, we believe L4/L5 autonomy at scale is well over a decade away. It will come folks, but it’s too darn difficult.”
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- Credit: Gary Black | Twitter
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- Credit: Gary Black | Twitter
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- Credit: Gary Black | Twitter
In reality, Tesla has made major strides in its FSD program through the Beta fleet, and Autopilot is coming off of one of its safest years in history when compared to nationwide accident data from the NHTSA. But whether Tesla will solve full autonomy by the end of the year as Musk expects truly remains to be seen.
Musk remains confident with Tesla’s development of FSD and said earlier this year that he would be “shocked” if the company cannot effectively develop major improvements and complete the suite by the end of 2022. Meanwhile, Tesla’s Robotaxi fleet will likely come with a dedicated vehicle design in the coming years, based on predictions from company executives during its most recent earnings call. While Tesla’s outlook on Robotaxis was previously about owners making money from the operation of the ride-sharing service, the automaker has shifted to another perspective, which aligns more with its focus on sustainability. Read more about that here.
Jonas still holds a $1,300 price target on Tesla stock with an ‘Overweight’ rating.
Disclosure: Joey Klender is a TSLA Shareholder.
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 Optimus is already benefiting investors, top Wall Street firm says
Piper Sandler has updated its detailed valuation model for Tesla (NASDAQ: TSLA), concluding that at recent share prices around $400–$420, investors are essentially acquiring the company’s ambitious Optimus humanoid robot project at no extra cost.
Tesla Optimus is already benefiting investors from a fiscal standpoint, at least that is what Alexander Potter at Piper Sandler, a top Wall Street firm covering the company, says.
Piper Sandler has updated its detailed valuation model for Tesla (NASDAQ: TSLA), concluding that at recent share prices around $400–$420, investors are essentially acquiring the company’s ambitious Optimus humanoid robot project at no extra cost.
Analyst Alexander Potter, in the firm’s latest “Definitive Guide to Investing in Tesla,” built a comprehensive framework covering 17 separate product lines.
This granular approach values Tesla’s core businesses—including electric vehicles, energy storage, Full Self-Driving (FSD) software, in-house insurance, Supercharging network, and a standalone robotaxi operation—at approximately $400 per share, without assigning any value to Optimus or related inference-as-a-service opportunities.
“At $400/share, we think investors can buy Optimus for ‘free,’” Potter stated in the note. Piper Sandler maintained its Overweight rating on Tesla shares and a $500 price target, which implicitly attributes roughly $100 per share to the robot-related businesses— a figure the analyst views as potentially conservative.
The updated model incorporates elements often overlooked by other sell-side analysts, such as detailed forecasts for Tesla’s insurance operations, Supercharger revenue, and a distinct valuation for the robotaxi business separate from FSD software licensing. It also accounts for Tesla’s 2025 CEO compensation plan for the first time.
Potter acknowledged that his estimates for 2026 and 2027 fall below Wall Street consensus, citing factors like declining deliveries from certain discontinued models and reduced regulatory credit income.
However, he expressed limited concern, noting that traditional vehicle delivery metrics are expected to matter less over time as FSD subscriber growth and robotaxi deployment metrics gain prominence. On Optimus specifically, Potter suggested the humanoid robot program, combined with inference services, “arguably will be worth more than Tesla’s other businesses combined,” though the firm has not yet produced formal long-term forecasts for these segments.
Tesla shares have traded near the $400 range in recent sessions, reflecting ongoing investor focus on the company’s autonomous driving progress and expansion into robotics and AI. The Optimus project remains in early development stages, with Tesla aiming to deploy the robots initially for internal factory tasks before broader commercial applications.
This Piper Sandler analysis highlights the growing emphasis among some investors and analysts on Tesla’s long-term technology platform potential beyond its current automotive and energy businesses.
As with any forward-looking valuation, outcomes will depend on execution timelines, technological breakthroughs, regulatory approvals for autonomous systems, and market adoption of humanoid robotics—areas that carry significant uncertainty and execution risk.
The note underscores a common theme in Tesla coverage: differing views on how to quantify emerging high-growth opportunities like robotics within the company’s overall enterprise value. Investors are advised to consider their own risk tolerance and conduct thorough due diligence regarding these speculative elements.
Elon Musk
Tesla confirmed HW3 can’t do Unsupervised FSD but there’s more to the story
Tesla confirmed HW3 vehicles cannot run unsupervised FSD, replacing its free upgrade promise with a discounted trade-in.
Tesla has officially confirmed that early vehicles with its Autopilot Hardware 3 (HW3) will not be capable of unsupervised Full Self-Driving, while extending a path forward for legacy owners through a discounted trade-in program. The announcement came by way of Elon Musk in today’s Tesla Q1 2026 earnings call.
🚨 Our LIVE updates on the Tesla Earnings Call will take place here in a thread 🧵
Follow along below: pic.twitter.com/hzJeBitzJU
— TESLARATI (@Teslarati) April 22, 2026
The history here matters. HW3 launched in April 2019, and Tesla sold Full Self-Driving packages to owners on the understanding that the hardware was sufficient for full autonomy. Some owners paid between $8,000 and $15,000 for FSD during that period. For years, as FSD’s AI models grew more demanding, HW3 vehicles fell progressively further behind, eventually landing on FSD v12.6 in January 2025 while AI4 vehicles moved to v13 and then v14. When Musk acknowledged in January 2025 that HW3 simply could not reach unsupervised operation, and alluded to a difficult hardware retrofit.
The near-term offering is more concrete. Tesla’s head of Autopilot Ashok Elluswamy confirmed on today’s call that a V14-lite will be coming to HW3 vehicles in late June, bringing all the V14 features currently running on AI4 hardware. That is a meaningful software update for owners who have been frozen at v12.6 for over a year, and it represents genuine effort to keep older hardware relevant. Unsupervised FSD for vehicles is now targeted for Q4 2026 at the earliest, with Musk describing it as a gradual, geography-limited rollout.
For HW3 owners, the over-the-air V14-lite update is welcomed, and the discounted trade-in path at least acknowledges an old obligation. What happens next with the trade-in pricing will define how this chapter ultimately gets written. If Tesla prices the hardware path fairly, acknowledges what early adopters are owed, and delivers V14-lite on the June timeline it committed to today, it has a real opportunity to convert one of the longest-running sore subjects among early adopters into a loyalty story.
Tesla (NASDAQ: TSLA) reported its earnings for the first quarter of 2026 on Wednesday afternoon. Here’s what the company reported compared to what Wall Street analysts expected.
The earnings results come after Tesla reported a miss on vehicle deliveries for the first quarter, delivering 358,023 vehicles and building 408,386 cars during the three-month span.
As Tesla transitions more toward AI and sees itself as less of a car company, expectations for deliveries will begin to become less of a central point in the consensus of how the quarter is perceived.
Nevertheless, Tesla is leaning on its strong foundation as a car company to carry forward its AI ambitions. The first quarter is a good ground layer for the rest of the year.
Tesla Q1 2026 Earnings Results
Tesla’s Earnings Results are as follows:
- Non-GAAP EPS – $0.41 Reported vs. $0.36 Expected
- Revenues – $22.387 billion vs. $22.35 billion Expected
- Free Cash Flow – $1.444 billion
- Profit – $4.72 billion
Tesla beat analyst expectations, so it will be interesting to see how the stock responds. IN the past, we’ve seen Tesla beat analyst expectations considerably, followed by a sharp drop in stock price.
On the same token, we’ve seen Tesla miss and the stock price go up the following trading session.
Tesla will hold its Q1 2026 Earnings Call in about 90 minutes at 5:30 p.m. on the East Coast. Remarks will be made by CEO Elon Musk and other executives, who will shed some light on the investor questions that we covered earlier this week.
You can stream it below. Additionally, we will be doing our Live Blog on X and Facebook.
Q1 2026 Earnings Call at 4:30pm CT https://t.co/pkYIaGJ32y
— Tesla (@Tesla) April 22, 2026
Tesla launches its solution to rare but relevant Supercharger problem
Tesla Optimus is already benefiting investors, top Wall Street firm says
