Morgan Stanley Reiterates $410 Price Target on Tesla
Morgan Stanley analyst Adam Jonas reiterated on July 24, 2025, a price target of $410 on Tesla, with an ‘Overweight’ rating on the stock.
“2Q numbers were a slight beat with FCF near break-even. Tesla is crossing the chasm to autonomy while absorbing slower volume, EV incentive elimination, tariffs and investing in new initiatives that may not make margins for years.
Key Takeaways from 2Q Results
Almost no detail on outlook
Tesla’s outlook continues to lack any specific targets on revenues or margins.
Transparency on robotaxi progress?
Very little information given on the current test size or performance other than the expansion of the geofence.
Elon Musk expressed ambitious targets for expanding unsupervised into new states (Bay Area, Florida) with dramatically expanded access to US population but offered little detail around execution.
Optimus ramp pushed out slightly
Expressed confidence in HW3 architecture (prototypes by end of year) with some changes that may push the scaled production ramp into next year.
Elon Musk expressed his target of 1mm unit annual Optimus production within 5 years.
Intangibles
Towards the end of the call, Elon Musk warned that the next few quarters may be ‘rough’ given changes in demand and the regulatory environment, including lower profit from the sale of ZEV credits.
There was no attempt to sugar coat the market headwinds for EVs through the remainder of the year.
Likely direction of consensus – modestly lower, especially for FY26
With the company highlighting the headwinds facing the next few quarters, we believe consensus is likely revised lower.
Our updated FY25 EPS is 14% lower vs. prior forecasts and FY26 is 7% lower, primarily driven by lower deliveries and higher operating expenses.
No AI day (yet)?
While we believe Tesla will eventually return to a cadence of ‘AI days,’ Elon Musk would not be drawn on setting an expectation for timing by year-end.
Governance and control
We asked Mr. Musk if he had any reservations about moving Tesla into dual-purpose physical AI while only having a 13% stake in the company.
He answered… “That is a major concern for me as I’ve mentioned in the past, and I hope that is addressed at the upcoming shareholders meeting.
“But yeah, it is a big deal. I (don’t) want to find that I’ve got like, so little control that I can easily be ousted by activist shareholders after having built this army of humanoid robots.”
This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.
