Key Highlights
- Morgan Stanley upgraded Tesla’s Q2 delivery projection to 413,000 units, exceeding the Street consensus of 406,000 vehicles
- European registrations for Tesla vehicles soared 107.9% year-over-year in June; Chinese domestic deliveries jumped 82% month-over-month from April
- The firm retained its Hold recommendation with a $415 price target, expressing caution over energy storage deployment challenges
- CEO Elon Musk announced FSD hardware updates for AI3 system owners, potentially boosting $99/month subscription adoption
- Operational convergence between Tesla and SpaceX intensifies with shared AI initiatives and semiconductor manufacturing; market observers anticipate possible merger within 12–18 months
Shares of Tesla (TSLA) advanced approximately 1.22% during Monday’s session, with early trading showing a 0.7% increase to $382.38 — momentum supported by an encouraging research note from Morgan Stanley.
Morgan Stanley’s Andrew Percoco elevated his second-quarter delivery projection for Tesla to 413,000 vehicles, a significant increase from his previous estimate of 373,000 units. This revised forecast positions him above the consensus Street estimate of 406,000 deliveries.
The upward revision stems from robust recoveries across European and Chinese markets, both of which had presented headwinds for Tesla’s performance throughout the previous year.
Across Europe, Tesla registrations increased 47% year-over-year during April. Preliminary statistics for June revealed an impressive 107.9% year-over-year surge to 28,610 vehicles, according to data from the European Automobile Manufacturers’ Association.
The Chinese market demonstrated similar strength. Domestic deliveries rose 23% year-over-year in May and experienced an 82% month-over-month spike from April, breaking a two-month streak of year-over-year declines.
Tesla plans to announce its Q2 delivery figures on July 2. FactSet analysts are forecasting approximately 409,000 vehicles, representing an increase from the 384,000 units delivered during Q2 2025.
Despite the improved delivery outlook, Percoco maintained his Hold recommendation alongside a $415 price target — suggesting roughly 9.3% potential upside from present levels. He highlighted Tesla’s energy storage segment as an area of concern, referencing project postponements experienced in the first quarter.
Energy Storage Segment Faces Headwinds
Percoco anticipates Tesla will deploy 11.8 GWh during Q2, falling considerably short of Street expectations hovering around 14.3 GWh. He does forecast improvement during the latter half of the year, projecting annual deployments near 55 GWh — aligned with broader market consensus.
The analyst community displays mixed sentiment on Tesla. TipRanks data shows TSLA carrying a Moderate Buy rating, supported by 11 Buy recommendations, 15 Hold ratings, and 3 Sell calls. The consensus price target stands at $403.49, suggesting approximately 6.3% upside potential. The stock has declined 15.6% year-to-date.
Monday’s positive price action received support from broader market strength, with S&P 500 and Dow futures climbing 0.7% and 0.3%, respectively.
Full Self-Driving Enhancements and SpaceX Collaboration
CEO Elon Musk contributed additional market buzz over the weekend through social media announcements. He revealed Tesla is deploying an enhanced version of its Full Self Driving hardware for users operating AI3 systems — the onboard computing platform launched in 2019. The enhancement carries significance considering AI3 possesses approximately 15% of the memory bandwidth available in the more advanced AI4 architecture.
For Tesla, this development creates opportunity: AI3 system owners may find increased incentive to subscribe to the $99/month FSD service.
Musk additionally highlighted SpaceX’s Grok 4.5 AI model being deployed across both Tesla and SpaceX operations, emphasizing the expanding operational integration between the two enterprises. The companies are working together on AI applications leveraging unused Tesla computational resources, and are jointly developing a semiconductor manufacturing facility named TeraFab.
Market analysts have been discussing the possibility of a Tesla/SpaceX combination occurring within the next 12 to 18 months. SpaceX executed what became the largest public offering in history during early June.
