Piper Sandler Reiterates Overweight on Tesla, $500 Price Target

Piper Sandler analyst Alexander Potter reiterated an Overweight rating and $500.00 price target on Tesla (NASDAQ: TSLA).

“When it comes to the efficacy of Tesla’s full self-driving (FSD) software, there’s no shortage of skeptics.

In meetings, clients frequently reference Waymo’s greater robotaxi deployment numbers as a reason to doubt Tesla’s readiness.

The uncertainty is exacerbated by a lack of universally-accepted, directly comparable datasets that measure disengagments, crashes, or other metrics.

Nonetheless, for the six reasons outlined below, we think Tesla has effectively achieved Level 4 autonomy (at least in most conditions). 1. Tesla is promoting insurance.

In May, we received a promotional email, dangling low premiums if we buy Tesla Insurance and use FSD frequently.

We’re long-time Tesla owners in Minnesota, where Tesla Insurance has been available since 1Q22. If Tesla thinks FSD is error-prone, why offer discounts for FSD-enabled policies? Why now? 2.

Tesla is building Cybercabs with no steering wheels or pedals. Volume production began in April, with plans to build hundreds per week. Dozens of Cybercabs have been spotted.

We think the production line will easily cost several hundred million USD (if not $1B+). If FSD is no good, why spend the capex? Why build Cybercabs? 3.

Tesla is seeking permits to build robotaxi infrastructure. The city of Irving, TX (near Dallas) is reviewing a proposal from Tesla to lease a 35k ft2 facility for storing/charging robotaxis.

The site has 212 parking spots and 16 Supercharger stalls. Facilities like this must necessarily predate fleet expansion. 4. Tesla is disclosing FSD subscriptions.

Tesla IR was historically unwilling to disclose FSD take rates (it was “noise, not signal”). But in 1Q26, the team changed this practice.

The implication: FSD adoption is now a core metric for gauging Tesla’s performance. In other words: FSD is ready for dissemination beyond early adopters. 5. Tesla is expanding its robotaxi service.

Tesla said it will launch robotaxis in 7 new cities by 1H26, beyond current fleets in Austin and the Bay Area.

This might be unrealistic (so far launches have only occurred in Houston and Dallas), but the trend is clear. Robotaxis are now available in the entire Austin metro area, including interstates. 6.

In April, my Tesla drove me from Missoula to Minneapolis. There’s no substitute for personal experience.

We’ve owned Teslas exclusively since 2016, and it’s true: the latest FSD versions are capable of “true” self-driving, especially in good weather.

A trans-Canada FSD roadtrip was recently uploaded to X, reinforcing the point.”

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.

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.