As Mr. Musk said in 2024 (and may have repeated in 2025):
This will be a spicy year pic.twitter.com/XG3pWJGS10
— Elon Musk (@elonmusk) March 26, 2024
A very deep dive from Investor's Business Daily, January 1:
Five months after Tesla (TSLA) CEO Elon Musk warned that the EV giant "could have a few rough quarters," through mid-2026, his words have proved all too true. EV sales, still the vast majority of Tesla's business, are falling for a second straight year, with no new traditional models on the horizon.
Yet investors have abandoned the sour views that knocked off a quarter of Tesla's stock value in just the first two months of 2025. Since Musk's EV comments in July, the stock has shot up 50%, reaching record highs as the new year neared. The rise reflects growing enthusiasm for the three businesses touted as Tesla's future growth engines: humanoid robots, battery storage and, most of all, self-driving technology and robotaxis.
The past two years have been a "transitional period for Tesla" with the legacy EV business slowing and its focus turning "to the future and what the next wave will be," Andrew Rocco, a Zacks Investment Research stock strategist who is "long" TSLA, told IBD. He added, "I see 2026 as a breakout year for Tesla."
Many Tesla analysts echo that view. Wedbush Securities' Dan Ives, a longtime bull, predicts a "defining year" for Tesla thanks to autonomy.
Self-Driving Leads Tesla Growth Drivers
Bullish investors and analysts have pinned their hopes on true self-driving rolling out rapidly in 2026.In recent weeks, videos on Elon Musk's social site X appear to show Model Y vehicles driving around Austin without a safety monitor inside.
Musk on Dec. 14 confirmed that "testing is underway with no occupant in the car."
It's not clear if the vehicles in the videos were truly unsupervised, or if support cars have safety monitors nearby.
Tesla has said its Cybercab should begin production in April. With no steering wheel or pedals, the two-passenger Cybercab will require self-driving to hit the road.
"We expect an accelerated Robotaxi launch across the U.S. with importantly volume production of Cybercabs starting in the April/May time frame. In a nutshell, we believe Tesla is taking major steps in advancing its AI Revolution path with autonomous and robotics front and center heading into 2026 that will be a 'game changer and define Tesla's future,'" Ives wrote.
Ives expects Tesla ride-hailing to roll out to more than 30 U.S. cities in 2026. He has a $600 price target on Tesla stock, which now trades near 450.
"We believe Tesla could reach a $2 trillion market cap over the coming year and in a bull-case scenario $3 trillion by the end of 2026," Ives said, as full-scale volume production begins of the "autonomous and robotics road map."
Tesla has a current market cap around $1.5 trillion.
Morgan Stanley analyst Andrew Percoco predicted in a Dec. 15 note that Tesla will "meaningfully increase its robotaxi fleet size" in 2026 to 1,000 vehicles, up from an estimated 50-150 on the road now.
"By the end of 2035 we expect Tesla to have 1 million robotaxis on the road across multiple cities," Percoco wrote.
Once unsupervised robotaxis roll out in geofenced areas of Austin and other markets, the expectation is that Tesla would quickly shift Full Self-Driving to unsupervised as well.
Musk's Tesla Self-Driving Promises
Elon Musk recently doubled down on his year-end 2025 forecast for an unsupervised Tesla robotaxi service in Austin.Even the most fervent fan knows that Musk's timelines for Tesla self-driving have been, at minimum, wildly optimistic. The Tesla CEO has predicted true autonomy "this year" or "next year" for nearly a decade.
Those deadlines generally have come and gone with little discontent, with investors quickly shifting to the next "next year" target.
However, Musk's latest promises have been so near term that they raised expectations that this time they would come true, if not by Dec. 31, then very soon after. That raises the stakes for a TSLA stock sell-off if the EV giant has no truly unsupervised vehicles well into 2026.
Alphabet (GOOGL)-owned Waymo and Amazon.com (AMZN)-owned Zoox are ramping up activity, with Waymo set to significantly expand the number of cities it operates in. Several Chinese firms, including Baidu (BIDU) and WeRide (WRD), are operating or testing robotaxis in a growing number of countries.
Tesla's vision-only system is still significantly cheaper to build than the multisensor Waymo and Zoox, though Baidu's latest Apollo Go robotaxis are below $30,000. Tesla's mass production means that the EV giant could scale up rapidly. This is why bulls see such a big opportunity.
But the longer Tesla takes to reach true autonomy, the more time rivals have to scale up and narrow the cost gap.
Musk's other recent near-term prognostications for Tesla robotaxis have missed the target.
On the Q2 earnings call on July 23, Musk predicted that the Tesla ride-hailing service would cover half the U.S. population by the end of 2025. On the Q3 call, Musk downsized that to eight to 10 major metro areas. But the robotaxi service ended 2025 in just Austin and the Bay Area, with a limited number of vehicles.
Tesla Optimus Robot, Hands Free
Along with self-driving, the Optimus humanoid robot is a potential TSLA stock driver. But even under Musk's latest timeline, it's unlikely to be a factor for Tesla's business in 2026.Musk said on the Q3 earnings call that Tesla will unveil a new Optimus sometime in early 2026. But much work is still needed. Musk said Tesla will continue to work on the all-important hands throughout 2026, explaining in detail how hard it is to replicate human hands.
As recently as May, Musk predicted "thousands" of Optimus robots would be working in Tesla factories by the end of 2025.
Optimus faces a lot of competition from other humanoid robot developers, many of which are in China. China also dominates the supply chain for key components.
It's still not clear what the use case will be for humanoid robots generally.
Tesla Energy Powers Higher
Unlike self-driving technology and humanoid robots, the Tesla Energy battery storage business is a current operation with rapid growth and fat profit margins. Offerings range from home Powerwalls to grid-level Megapacks.The battery storage segment remains a relatively small portion of overall revenue, which is still dominated by the ailing automotive business. Tesla is expanding Megapack production capacity, including at its Lathrop, Calif., facility.
Tesla deployed a record 12.5 gigawatt-hours of energy storage in Q3 vs. 9.6 GWh in Q2 and 6.9 GWh in Q3 2024.
Morgan Stanley's Percoco values the Tesla Energy business at $40 per share. He noted that since 2022, its battery storage deployments have grown at a compound annual growth rate of 91%. Tesla held an 18% share of the global battery storage market as of 2024, according to Morgan Stanley.
Percoco estimates Tesla Energy's storage volumes by GWh deployed will grow 18% a year through 2040.
Total Tesla energy and storage revenue is forecast to swell from $10.09 billion in 2024 to $16.86 billion in 2026, continuing to grow to $110.51 billion by 2040, according to Morgan Stanley. Its gross margins in the business rose from 7% in 2022 to 30% in 2025, Morgan Stanley says. Gross margins are expected to come in at 29.9% in 2026.
President Donald Trump's tariff policies could hit Tesla's energy storage business, even as the EV giant may be passing on those costs to customers.
"Their energy business is really the most consistent growth area," Rocco said. "With the buildout of AI data centers, they're going to need those storage batteries."....
....MUCH MORE
Premarket the stock is up $5.97 (+1.33%) to $455.69 on a generally upbeat day.
The all-time-high is some 40 bucks higher, December 22's $498.83, intraday
As recapitulated in June 2024's "Morgan Stanley Analyst Adam Jonas Writes A Love Letter To Tesla (TSLA)":
A confession of bullish bias up front, from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":
In pre-market action the stock is up $17.47 (+12.07%) at $162.15.
Below are the words that are adding billions ($50+) to the company's valuation.
Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....
Still riding the tiger eh, wot.
