Morgan Stanley Raises Tesla Price Target to $430, Eyes $800 in Ambitious Bull Case as Autonomous Tech Advances

Morgan Stanley (NYSE:MS) has recently adjusted its outlook on Tesla (NASDAQ:TSLA) by raising the price target for its shares from $400 to a more optimistic $430. But the firm isn’t stopping there; they’ve also introduced an ambitious bull case price target of $800, buoyed by Tesla's ongoing advancements in autonomous vehicle (AV) technology and the strategic integration of embodied artificial intelligence.

Tesla continues to lead in the growing autonomous mobility market, thanks to its expertise in data collection, energy storage, robotics, and AI infrastructure. Analysts highlight Tesla Mobility, the company’s autonomous ridesharing division, now valued at $90 per share in their updated analysis. By 2040, Tesla’s fleet could grow to 7.5 million vehicles, generating $1.46 per mile in revenue with a 29% EBITDA margin.

The importance of Tesla’s Network Services, which includes Full Self-Driving (FSD), supercharging, and software upgrades, is also growing. Analysts expect this segment to make up one-third of Tesla’s EBITDA by 2030 and nearly 60% by 2040. They now value Network Services at $168 per share, emphasizing its key role in Tesla’s future.

The new price target is based on stronger estimates for Mobility and Network Services, though a reduced valuation for Tesla’s 3rd Party Battery business offsets this. Analysts note that opportunities in areas like aviation and marine sectors, tied to Tesla’s AI advancements, remain unexplored in this valuation.

Tesla’s unsupervised autonomous vehicle fleet is expected to debut in city environments by 2026, but broader deployment will likely take much longer. Regulatory challenges and technological hurdles could delay commercialization, making these factors significant risks.

Morgan Stanley analysts present two scenarios:

• Bull Case: A valuation of $800, with a fleet of 12 million vehicles by 2040, $1.50 revenue per mile, and a 45% EBITDA margin. This assumes strong domestic and international growth.
• Bear Case: A valuation of $200, factoring in stricter regulations and slower adoption in key markets.

Whether you’re optimistic or cautious, Tesla’s evolving role in autonomous transportation makes it a company to watch.