Investor's Corner
Tesla skeptic changes tune on Model 3 battery costs: ‘TSLA remains ahead of the pack’
Longtime Tesla skeptic UBS appears to be taking a rather bullish outlook on the electric car maker. In a recent note, UBS analyst Colin Langan raised his price target for Tesla stock (NASDAQ:TSLA) from a conservative $190 to a more optimistic $230, citing the Model 3’s battery cost advantages over competitors currently available in the market.
The UBS analysts, together with a group of engineers, analyzed batteries from Panasonic/Tesla, LG Chem, Samsung SDI, and Contemporary Amperex Technology (CATL). According to the team’s analysis, the Model 3’s batteries, which are produced at the Gigafactory 1 in NV, are around 20% more cost efficient than LG Chem’s batteries, which are the second-best in the list. The UBS analysts estimated that Tesla’s batteries currently cost $111 per kWh, which is around $37 per kWh cheaper than LG Chem’s batteries, its closest competitor.
In what could only be described as an admission of miscalculations in the past, UBS analyst Colin Langan, who has consistently given TSLA a “Sell” rating, noted that the firm now believes that competitors from established automakers would likely be less profitable than the electric car maker in the EV market.
“Contrary to our team’s previous view, they now believe incumbent OEMs will be less profitable than Tesla in EV space. Tesla’s cost advantage can be defended (at least temporarily) because other OEMs will not switch to cheaper NCA chemistry. We continue to believe that TSLA remains ahead of the pack when it comes to EV tech,” the analyst noted.
Based on Tesla’s lower cost battery and considering non-zero emission electric vehicle credits, the UBS analyst also boosted his fiscal 2019 earnings per share estimate for the electric car maker by $5.85 to $3.55, as noted by The Fly. Keeping his longtime stance on the company, though, Langan nevertheless maintained a “Sell” rating on Tesla, with a price target of $230.
-->While the financial firm remains notably skeptical about Tesla as evidenced by Langan’s consistent “Sell” rating, UBS’ admission of the Model 3’s battery cost advantages could very well signify a shift in Wall Street’s general perception of the electric car maker. Together with a vote of confidence from Zacks Investment Research in the form of a “Strong Buy” rating after Tesla’s release of its third quarter earnings, Tesla’s capability to maintain profitability in the coming quarters is beginning to appear incredibly feasible.
Elon Musk noted during the third quarter earnings call that Tesla would have a positive net income and cash flow in the present quarter, and in all quarters moving forward. Musk even remarked that even in times when Tesla has to conduct repayments, the company should display a flat cash flow.
“We expect to again have positive net income and cash flow in Q4. And I believe our aspiration is something that will be for all quarters going forward. I think we can actually be positive cash flow and profitable for all quarters going forward, leaving aside the quarters where we may need to do a significant repayment but — for example, in Q1 next year. But I think even in Q1, I think we can be approximately flat in cash flow by end of quarter,” Musk said.
Behind these predictions lies Tesla’s battery technology, which continues to get better over time. As noted by President of Automotive Jerome Guillen, Tesla’s batteries are always in a state of improvement. Thus, while UBS’ analysis has concluded that the Model 3’s batteries are the best in the market, Tesla’s batteries in the coming months would likely show an even wider gap over its competitors.
“We are improving the design of the cell. The design of the cell is not frozen. It evolves, and we have a nice roadmap of technology improvements for the coming years,” Guillen said.
-->Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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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