TD Cowen Reaffirms $509 Price Target on Tesla
TD Cowen analyst Itay Michaeli reiterated a Buy rating and $509 price target on Tesla.
“We hosted a Mobility Bus tour in Austin last week, including visits to Tesla and Mobileye.
One common thread from our trip is that rapid AV scaling in the coming years has become a question of when, not if.
We walked away from our Tesla visit with added conviction in our Buy thesis.
We hosted a tour of Giga Texas, experienced FSD rides (including V14) and met with the IR team.
We walked away with added conviction in our Buy-thesis.
Top 3 takeaways:
(1) FSD rides were smooth & impressive.
(2) We gained greater appreciation for the degree of manufacturing innovation going into Cybercab.
We see a path for Cybercab to achieve a ~ $0.30 RoboTaxi cost/mile, below the $0.38 we previously modeled, allowing Tesla to offer AV trips at a price/mile that competes with personal mobility.
By our estimates, every 5% US VMT penetration in just the low/mid-population dense MSAs (i.e. arguably easier deployments) could unlock a ~$100bln revenue opportunity at $1/mile.
We regard the Apr 2026 Cybercab SoP as a sign of Tesla’s confidence in scaling RoboTaxis on HW4, and believe a successful ramp could result in a step-function change in Tesla’s revenue growth outlook, with AVs expected to become financially material contributors in H2’26.
(3) Significant SW improvement still exists on HW4, with V14 expected to achieve a 10x parameter count.
Tesla’s strong SW/HW integration will be further leveraged with AI5/6.”
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