Tesla (TSLA) is on a more than 40% tear since Donald Trump’s election win, as investors speculate that self-driving is coming soon, with the Trump administration easing the regulatory path for autonomous vehicles.
TSLA stock surged 5.3% to 389.22 during market action on Friday, part of a 12.9% gain for the week.
Bank of America analyst John Murphy early Thursday raised his Tesla stock price target to 400, up from 350, and maintained a buy rating.
The analyst hiked his price target after visiting Tesla’s Texas gigafactory. Murphy wrote that Tesla is well-positioned to grow in 2025 and beyond with its core EV business and launch of its robotaxi, as well as longer-term from its investments in Optimus.
Murphy added that the Optimus humanoid robot is “real” adding that “development” is “poised to accelerate.”
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Tesla stock has been consolidating around highs in recent weeks. With Trump winning the White House, the top question for investors is: when is it a good time to buy or sell Tesla stock.
The Delaware Court Decision
Meanwhile, Delaware Court of Chancery Judge Kathaleen McCormick, in a late Monday decision, stuck with her January decision and once more rejected Chief Executive Elon Musk’s $56 billion compensation package from 2018. As of Monday’s close, it was worth $101.5 billion.
In a statement on X, Tesla said it will appeal the court’s decision.
In June, some 77% of shareholders voting approved giving Musk his 2018 $56 billion pay package, or 72% excluding Musk and his brother, Kimbal Musk. Tesla shareholders also voted this year in favor of reincorporating the company in Texas, moving it from Delaware.
Before the June shareholder vote, Musk suggested he might shift Tesla resources to his privately held xAI if he didn’t get the pay deal, as well as further power giving him a 25% voting stake.
Musk currently has a nearly 13% stake in Tesla. Prior to selling TSLA shares to purchase Twitter, now X, for $44 billion in late 2022, Musk owned around 22% of Tesla.
Judge Kathaleen McCormick wrote in Monday’s opinion that, “Even if a stockholder vote could have a ratifying effect, it could not do so here.”
Upgrades And Price Target Hikes
Stifel on Monday hiked its Tesla stock price target to 411, up 287, essentially all on a “clearer path” for the Cybercab, or robotaxi, and Tesla’s Full Self-Driving, FSD, technology. The Stifel analysts maintained EBITDA targets essentially flat for 2024-2025 and lowered them for 2026.
Tesla stock also received an upgrade to a buy rating, up from neutral, from Roth MKM on Monday. The analysts have a 380 price target on the shares compared to its previous 80 Tesla stock price target.
Roth MKM writes that Musk’s “authentic support for (President-elect) Trump likely doubled Tesla’s pool of enthusiasts and lifted credibility for a demand inflection.”
Meanwhile, Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote on Sunday that Trump could “accelerate some of the FSD and autonomous initiatives for Tesla once he is in the White House.”
“The autonomous fast tracking will be front and center for investors in this scenario as some of the 2026-27 goals for Tesla could be markedly accelerated to stay on track with the China timeline for autonomous currently underway,” Ives said.
“We believe a Trump White House helps unlock the $1 trillion of autonomous/AI value to Tesla’s stock as autonomous/FSD is likely accelerated starting in 2025 and a tailwind for Cybercab timing,” he added.
FSD Version 13
The EV giant began rolling out its latest FSD upgrade over the weekend to employees and limited outside customers.
The EV giant has hyped-up expectations by predicting its FSD version 13 will show a six-times improvement in terms of miles-per driver intervention. Currently, FSD v13 appears to be a limited version, but has the ability to unpark, reverse, and park. It is still listed as “supervised” FSD, according to Tesla.
“New brain who dis (sic),” the company’s artificial intelligence social media account, Tesla AI, posted to X on Saturday.
Musk has said he expects FSD to achieve true self-driving by mid-2025, though he’s said similar “this year” or “next year” statements for about a decade.
Musk on the third-quarter earnings call said he expects “fully autonomous unsupervised FSD in California and Texas next year — that’s with the Model 3 and Model Y.” However, Musk admitted that he tends to be a “little optimistic with time frames.”
Musk also conceded on the Q3 call that Tesla EVs with Hardware 3.0 might not be able to achieve true self-driving. He said if that’s the case, Tesla will upgrade FSD customers with HW3.0 for free.
IRA Tax Credit
TSLA shares about 5.8% on Nov. 14 amid reports the president-elect’s transition team plans to discontinue the Inflation Reduction Act, IRA, $7,500 EV consumer tax credit. The move was not a surprise to analysts and Musk has appeared to already endorse the idea of cutting the tax credit, echoing the belief that Tesla can thrive without it.
However, if the IRA tax credits are stripped away, it could hit Tesla’s auto business. The EV giant has already slashed prices repeatedly over the past year to drum up consumer interest amid waning demand.
Tesla continues to ramp up incentives, especially in the U.S., as the company targets record deliveries in Q4. The EV giant recently announced a year-end discount on local Model Y sales. Analyst consensus currently forecasts 498,000 vehicle deliveries in Q4 and 1.79 million for 2024, according to FactSet. Tesla’s previous quarterly high-water mark was 485,000 in Q4 2023.
“We expect Musk to have a big seat at the table as these EV discussions happen within the Trump transition team,” Ives wrote at the time. “We believe any sell-off in Tesla from these reports is the wrong knee-jerk reaction and we would be buyers.”
Since Nov. 14, Tesla stock has rebounded more than 13%.
The Musk-Trump Alliance
Analysts generally see the Trump presidency as an overall negative for EVs, but a positive for Tesla. Musk fostered a good relationship with the president-elect after campaigning tirelessly for him throughout the election cycle.
Late on Nov. 12, Trump announced in a statement that Musk and Vivek Ramaswamy will lead the Department of Government Efficiency (DOGE) to “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures and restructure Federal Agencies.”
Musk, in the statement, said, “This will send shockwaves through the system.”
The Department of Government Efficiency is tasked with providing “advice and guidance from outside of Government and will partner with the White House and Office of Management & Budget.”
“Musk’s significant influence in the Trump White House is already having a major influence and ultimately the golden path for Tesla around Cybercabs and autonomous is now within reach with an emboldened Trump/Musk strategic alliance playing out in real time and very in line with our thesis,” Ives wrote on Nov. 29.
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Meanwhile, Adam Jonas, Morgan Stanley’s high-profile auto analyst and a TSLA bull, wrote on Nov. 11 that the “investor perception” of Musk has “significantly evolved” over the past week.
“Elon Musk’s public support for President-elect Trump has vaulted Tesla’s CEO to be considered a powerful voice in the incoming administration,” Jonas said.
Tesla: Third-Quarter Earnings
The EV giant’s third-quarter earnings unexpectedly rose 9% in the third quarter, snapping a four-quarter string of year-over-year declines. Revenue came in slightly below forecasts. Gross margins jumped, fueled by strong Tesla Energy margins and a record-low cost of goods sold.
Regulatory credits were high at $739 million, though below Q2’s $890 million. FSD revenue recognition also may have helped.
Tesla’s CFO said the EV maker may not be able to sustain Q3’s margins in Q4. Plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025, Tesla reported Wednesday.
Notably, Tesla expects to report higher deliveries for the full year, which will require a big gain in Q4. Tesla has ramped up incentives in the past few days, with 0% financing and higher inventory discounts.
On the Tesla earnings conference call, Musk said he expects vehicle deliveries will rise 20%-30% in 2025. He also pegs Q2 2025 as the internal target for FSD unsupervised to be safer than a human driver.
Tesla said it’s testing a ride-hailing services with employees, using a human safety driver. That hit shares of Uber (UBER) and Lyft (LYFT) early Thursday.
Musk said that the upcoming “affordable” EV will cost less than $30,000, “with incentives.” But if that assumes the $7,500 IRA tax credit, that suggests the list price will be below $37,500, but perhaps not much more.
Wall Street consensus also has 2024 Tesla earnings firmly below last year’s level. That signals another year of earnings declines for this growth stock. Analysts currently expect Tesla earnings per share of just $2.42 in 2024, according to FactSet. That would be about a 22% decline vs. $3.12 in 2023.
Tesla Earnings Unexpectedly Rise 9% In Q3, Elon Musk Bullish
Read more on Tesla second-quarter earnings or on the company’s first-quarter report.
Tesla Stock: The Robotaxi Event
Musk set sky-high expectations for the “We Robot” event. But after showing off a Cybercab and Robovan late on Oct. 10, the market seemed unimpressed with Musk as he once more claimed full autonomous driving will come “next year” but did not offer any details or updates of an “affordable” EV.
The event was high on theatrics with Musk riding the two-seat Cybercab, with butterfly doors and no steering wheel, briefly to the stage to give his remarks. Dancing Optimus robots were paraded out with the Tesla humanoids serving attendees drinks. However, the consensus among analysts was that while the event was high on pomp and circumstance, it underdelivered on details.
“That’s it? Disappointing lack of detail,” Jonas proclaimed in his investor note following the event. Wells Fargo analysts echoed that sentiment, writing that Tesla’s robotaxi event was mostly “razzle-dazzle” with “little substance.”
Jonas said he had been looking for on quantifiable data on the improvements to Tesla’s Full Self-Driving, known as FSD. Jonas was also expecting strategy on the business for a supervised and unsupervised ride-sharing service.
“We were overall disappointed with the substance and detail of the presentation. As such, we anticipated TSLA to be under pressure following the event,” Jonas added.
Tesla Robotaxi Event: Cybercab, Robovan Unveiled; Musk Sees Self-Driving ‘Next Year’
What Investors Learned
Musk did say he expects the Cybercab price tag will be below $30,000, with production starting “before 2027.”
Musk has said for years that Tesla would achieve self-driving “this year” or “next year,” while production targets often slip considerably. He also didn’t offer new evidence that Tesla FSD was making progress toward actual self-driving.
The Tesla chief also showed off the latest Optimus robot. He expects that the cost could be $25,000-$30,000 when produced at scale.
Cathie Wood On The Robotaxi
Tesla stock sold off hard the day following the robotaxi event, sending a sell signal to investors. However, Cathie Wood and her Ark Invest ignored that and purchased nearly $3 million in TSLA shares.
Wood, who has long been super-bullish on Tesla’s autonomy push and robotaxi aims, attended Tesla’s robotaxi event on Thursday. On June 12, Ark Invest updated its Tesla stock price target to 2,600 by 2029, estimating that around 90% of Tesla’s enterprise value and earnings will be attributed to the robotaxi business in 2029.
Wood’s Ark Invest tends to purchase Tesla stock and other positions amid sell-offs or when they break below key moving averages.
Without a robotaxi network and business, Ark Invest says its TSLA price target would be around $350 per share, according to the report.
“We remain confident that the service will launch within the next five years,” Ark Invest said.
Elon Musk, Layoffs And Superchargers
With Musk focused on full self-driving and artificial intelligence, he has also been shaking up Tesla, letting top executives go and announcing layoffs, this year.
Musk decided to let two top executives go while also cutting the EV company’s entire supercharger team, according to reports on April 30.
In late April, Musk dismissed Rebecca Tinucci, senior director of Tesla’s supercharger efforts, and Daniel Ho, head of the new vehicles program. The Tesla CEO also reportedly cut teams under Tinucci and Ho along with laying off its public policy employees and the entire staff working on Tesla superchargers.
However, since then he appears to have since started hiring back employees.
Musk also decided in April to lay off more than 10% of Tesla’s global workforce, an effort to prepare for the “next phase of growth.” Drew Baglino, who served as senior vice president of powertrain and energy, and Rohan Patel, vice president of public policy and business development, both departed Tesla around the time of those cuts.
Meanwhile, reports emerged on Aug. 20, that Uber has hired Tinucci to oversee the company’s shift to electric vehicles. Tinucci will start her new position on Sept. 16.
In October, U.S. robotaxi industry leader Waymo, a unit of Alphabet (GOOGL), hired Daniel Ho.
Tesla EVs In Regulators’ Sights
The National Highway Traffic Safety Administration announced on Oct. 18 it has opened a preliminary investigation into Tesla’s Full Self-Driving, or FSD, technology in more than 2 million vehicles amid reports of four collisions, including one fatal accident, that appear to involve the autonomous driving feature in reduced visibility conditions.
The regulators said the investigation will cover 2.4 million Tesla vehicles and will look at how FSD technology detects and responds to low visibility conditions.
In December 2024, Tesla performed an over-the-air software “recall” on more than 2 million vehicles after federal regulators determined Tesla’s Autopilot system is prone to misuse after reviewing 1,000 accidents.
Is Tesla Stock A Buy?
Tesla stock fell 2.1% to 345.16 last week, but popped 3.7% on Friday. Shares have been consolidating around 34-month highs for the past couple of weeks. TSLA stock is now on the IBD Leaderboard watchlist.
Tesla stock has surged in recent weeks in part on hopes that self-driving is finally on the way. Tesla topped the $1 trillion mark on Nov. 8 for the first time in two years. On Nov. 6, Tesla stock gapped up above an alternate handle buy point of 273.54 but was quickly extended.
Tesla stock ranks first in the 35-member IBD Auto Manufacturers industry group. The stock has a 90 Composite Rating out of a best-possible 99. Shares also have a 96 Relative Strength Rating and a 78 EPS Rating.
Almost single-handedly, Elon Musk has turned the auto industry on its head. He has essentially forced it to get aboard the electric-vehicle train. Tesla has been a monster stock over much of its history, especially during its stratospheric run from mid-2019 to late 2021.
Tesla stock has cleared the 20% profit from a recent 264.86 handle entry. It is also extended from an alternate handle buy point at 273.54. TSLA has yet to cool down from its big post-election boost and consolidating near highs.
Please follow Kit Norton on X @KitNorton for more coverage.
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