Investor's Corner
Tesla’s record-valuation is based on lack of “real competition,” researcher says
Tesla (NASDAQ: TSLA) will see a shift in valuation when competing automakers with “know-how” come to the forefront with comparable electric models, Anna-Marie Baisden of Fitch Solutions said.
Baisden, head of Automotive Research for Fitch, appeared on CNBC’s Street Signs on Wednesday morning ahead of Tesla’s Q2 2020 Earnings Call.
The researcher said that Tesla’s valuation as a company would begin to “shift” when automakers with experience begin producing electric models for their fleet of vehicles. Baisden specifically mentioned European automakers, such as BMW, who are slotting out time in production facilities to make way for the manufacturing of sustainable, electric cars.
Baisden was sure to give credit where credit was due, however. She recognized Tesla’s surge to superstardom and indicated that the company’s performance throughout the past few quarters has helped it develop into a notable force in the automotive industry.
“At the moment, if you look at it as a standalone company, it performed in terms of its deliveries, in terms of what was expected. It started meeting goals. It started becoming profitable,” Baisden said.
-->But she is skeptical that Tesla will be able to keep its skyrocketing valuation when other car companies begin producing cars that can compete with Tesla’s fleet.
“I think where the question comes in is when its competitors start to also have their electric models available, and you start to see some real competition. Then we might start to see some shift on valuation.”
Currently, Tesla has a $293.58 billion valuation as its stock price sits at $1,569.28. It is the most valuable automaker in the world, leading the second-place company, Toyota, by around $120 billion.
Tesla is the industry leader in electric vehicles, and it isn’t a very close competition. While the company has continued to evolve its products into high-performance, long-range machines capable of updating themselves over the internet, other automakers have struggled to produce an electric vehicle with suitable or acceptable range.
Other companies who have already embraced the electric revolution have had issues with infrastructure. Volkswagen is likely the most notable company to have problems with electric cars because of extensive software problems that have delayed the release of its ID.3.
-->Meanwhile, BMW has tried to develop the iX3 and the i4 to compete with Tesla’s vehicles. The iX3 was scrapped for the U.S. market, and the company recently abandoned its self-driving partnership with Mercedes-Benz because of plunges in demand.
Competition will continue to drive Tesla to be better, but no company has emerged as a favorite to dethrone the Elon Musk-led automaker. Perhaps Tesla’s most significant advantage is the fact that it focuses specifically on electric vehicles, while others are still working to advance internal combustion engines.
The specific focus that Tesla holds with electric cars will give the company a significant advantage for years to come. Volkswagen executives have already admitted that Tesla holds a substantial lead in terms of tech, and the fact that the electric automaker is the only company that owns a specific focus on electric cars gives it an advantage for years to come.
Tesla will hold its Q2 2020 Earnings Call at 2:30 PM PDT today, July 22.
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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