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Investor's Corner

Tesla Q3 Earnings tempers analysts outlook as price targets lower

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Tesla (NASDAQ: TSLA) Earnings tempered analyst outlooks on the electric automaker’s stock as one firm referred to the call as a “mini disaster,” and another questioned whether shares could be looked at from a growth perspective as CEO Elon Musk advised investors that the company would take a cautious attitude toward the future with uncertain macroeconomic conditions.

Tesla’s Q3 2023 Earnings Call was one of the most cautious and perhaps worrisome in years as the automaker admitted high-interest rates and future projects could yield what would be looked at as less-than-favorable for short-term investors.

Long-term Tesla permabulls could not be shaken from their firm stance that the company is set for monumental growth moving forward, and how could they? Musk continued to speak positively about overall growth for Tesla in terms of autonomy, AI, and cell production.

However, analysts are adjusting their 12-month price targets on the stock as Musk’s tone during the call was cautious and aware of the rough waters that lie ahead.

“I’m not saying things will be bad. I’m just saying they might be,” Musk said during the Call. “And I think like Tesla is an incredibly capable ship, but we need to make sure like as…if the macroeconomic conditions are stormy, even if the best ship is still going to have tough times. The weaker ships will sink.”

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Musk acknowledged the rough waters that likely lie ahead for the Tesla ship, and waves will consist of high-interest rate environments, which will temper demand for its vehicles as consumers struggle to keep up with inflation and lengthy waits for Cybertruck to contribute positive cash flow for the company.

“We have seen the highest highs and some very challenging times from Tesla and Musk over the last decade, with last night’s quarter and conference call not an inspiring one for the bulls,” Wedbush’s Dan Ives wrote in a note.

“In a nutshell, we would characterize last night’s conference call as a ‘mini disaster’ as the Street wanted to get their arms around the falling margins and constant price cuts seen globally, but instead, we heard from a much more cautious Musk which focused on higher interest rates, FSD/AI investments, and highlighting the difficult path for Cybertruck production over the next 12 to 18 months.”

Ives pushed Wedbush’s price target on Tesla down to $310 from $350, citing a “more cautionary near-term dynamic for Musk & Co.”

Adam Jonas of Morgan Stanley shared similar sentiments, adjusting his price target from $400 to $380.

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“How can we be overweight [on] Tesla despite the company’s caution on macro, consumer, Cybertruck and Mexico? Can a ‘growth stock’ work if earnings don’t grow in 2024?” he wrote.

Jonas and fellow Morgan Stanley associates characterized the call as “one of the most cautious Tesla conference calls we’ve heard in years.”

Musk announced that not only would Cybertruck confront Tesla with “enormous challenges” in terms of the initial production ramp and becoming cash flow positive, but that Gigafactory Mexico won’t be a “full tilt” effort until the global economic outlook becomes more stable.

It was not all bad. Model Y is trending to be the best-selling car in terms of revenue and unit value, Autopilot has driven over 500 million miles with Full Self-Driving beta, and energy storage was robust for the quarter. Cybertruck even got a date for the first deliveries, November 30.

Tesla confirms Cybertruck deliveries for November 2023

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However, analysts advise investors to be more cautious as Tesla will have more challenges over the next year. As Tesla is not immune to ones that will impact the global markets, and Musk’s cautionary tone for the Call was indicative of the tumultuous waters the automaker will face moving into 2024 and beyond.

Disclosure: Joey Klender owns Tesla stock.

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.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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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.

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Credit: Tesla Optimus/X

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.

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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.

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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.

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Credit: Tesla

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.

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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.

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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.

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Credit: Tesla China

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. 

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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.

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