Morgan Stanley Raises Tesla (TSLA.US) Target to $415: Robotaxi Expansion Continues, Model YL Launch in US Opens New Growth Opportunities
According to Zhihui Finance, Morgan Stanley commented in a recently released research report on two major events related to Tesla (TSLA.US): the rollout of its Robotaxi (autonomous ride-hailing) service in Miami and the launch of the long-wheelbase, three-row, six-seat version of the Model Y (Model YL) in the US. At the same time, the firm assigned Tesla an “Equal-weight” rating in its report, with a target price of $415. This target price offers about 3% upside compared to Tesla’s closing price on Tuesday.
On July 3 local time, Tesla officially launched its Robotaxi service in Miami (including vehicles operating without human supervision). In the Q1 FY2026 earnings presentation materials, Miami, along with Phoenix, Orlando, Tampa, and Las Vegas, were listed as cities “in preparation.”
Morgan Stanley estimates that Tesla will roll out Robotaxi service across all these major metropolitan areas by the end of this year. Additionally, suspected Robotaxi test vehicles have recently been spotted in New Orleans (not yet confirmed by Tesla), even though the city was not on the list of preparatory cities in the previous quarterly earnings presentation materials.
Morgan Stanley believes that after seeing a decline in the number of active Robotaxi vehicles (according to Robotaxi Tracker data, though not confirmed by Tesla) since the end of April, this latest update is likely to be well received by the market, as there were previous concerns that the pace of Robotaxi expansion was slowing down.
Last month, Morgan Stanley also pointed out that Alphawise data show the Austin North metropolitan area is ramping up recruitment of AI Safety operators, suggesting Tesla is preparing to scale up its Robotaxi operations. At the same time, usage of FSD (Full Self-Driving) continues to accelerate, with cumulative miles driven reaching 10 billion as of early May.
Morgan Stanley has also established a set of Austin Robotaxi fleet monitoring indicators based on standardized data from the National Highway Traffic Safety Administration (NHTSA). Data show that since the launch of Robotaxi, the average mileage per accident has significantly improved. Given the market’s ongoing debate over Tesla’s autonomous driving roadmap, investors are focusing closely on the pace of monthly safety improvements.
Morgan Stanley believes Tesla’s ability to continually improve its accident rate (i.e., the average mileage between accidents increases) as it expands the Robotaxi fleet will be the most critical metric for investors to determine the success of the Robotaxi business. The bank forecasts that by the end of this year, Tesla’s Robotaxi fleet (including both human-supervised and unsupervised vehicles) will reach 1,500 vehicles, and will expand to 30,000 vehicles before 2030. Although the absolute number of Robotaxis this year will still have a limited contribution to profits, changes in the pace of Robotaxi rollout will provide clearer guidance for those who still doubt whether Tesla’s autonomous driving technology can be commercialized at scale.
In addition to the progress of Robotaxi deployment, Tesla also announced last week that it will launch the larger Model YL in the US, with deliveries slated to begin in October. The starting price is $61,990, which includes: one year of FSD service; one year of Supercharging; one year of premium car connectivity services; and free selection of all body colors.
The introduction of Model YL in the US market follows its successful launch in China earlier. This six-seat, long-wheelbase SUV was first released in China last year, priced about $4,000 higher than the standard Model Y. In comparison, the US Model YL is roughly $12,000 more expensive than the Model Y Premium AWD version, and about $22,000 higher than the Model Y Rear-Wheel Drive version.
Morgan Stanley notes that the strong initial demand for Model YL after its launch in China demonstrates robust consumer interest in more spacious, three-row Tesla models, which is likely a key reason for Tesla to bring this model to the global market. US customers are expected to begin taking delivery in October this year, so this model will likely contribute more significantly to sales in Q4 2026 and 2027. In the long term, Model YL expands Tesla’s addressable market by targeting large families, partially fills the market vacancy left by the discontinued Model X, helps improve product portfolio and average selling price (ASP), and supports ongoing demand for Model Y in key markets.
Morgan Stanley’s target price for Tesla is $415. The bank explains that this target price is comprised of the following five components: 1) Core Auto Business: $45 per share; 2) Network Services: $144 per share; 3) Robotaxi Mobility Business: $125 per share; 4) Energy Business: $40 per share; 5) Humanoid Robots: $60 per share.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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