Tesla stock closed up 2.2% on Monday as investors continued to weigh Wall Street, interest rates, and what President-elect Donald Trump would mean for the stock. The shares gained another 2.4% in premarket trading Tuesday.
Morgan Stanley has revised its price target for Tesla shares, increasing it to $430 from $400, with a new bull case valuation of $800. Tesla’s advancements in autonomous vehicle (AV) technology and its integration of embodied AI are highlighted as key drivers for the updated valuation.
According to the report, Tesla’s unique combination of expertise in data collection, robotics, energy storage, and AI/compute infrastructure has positioned it as a leader in the emerging autonomous mobility market.
Over the weekend, Axios reported that Tesla’s regulatory credit sales were at risk from Trump policies. For investors, it isn’t a new issue. Wall Street has discussed it for a few months.
Still, it might have affected the stock early on Monday. Shares of the electric-vehicle producer were down most of the day, as low as $380.07, down 3.7%. Things turned around late and the stock closed up 2.2% at $403.31 while the S&P 500 and Dow Jones Industrial Average gained 0.2% and 0.9%, respectively.
Federal purchase incentives worth up to $7,500 for qualifying EVs are expected to go away. Losing the credit is effectively a price increase for Tesla and other EV producers—making the products less affordable.
That’s a hurdle for Tesla, and others, to overcome. What’s going to happen to credit sales is harder to say.
For now, the status of regulatory credit sales is a watch item for investors. To be sure, investors expect the Trump administration—overall—to benefit the auto maker.
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