Tesla (TSLA) trades higher after updating investors on the company’s strategic pivot from being a traditional automaker toward autonomy, robotics, and energy. CEO Elon Musk said Tesla (TSLA) has revised its mission to focus on “amazing abundance,” emphasizing AI and robotics as the core of the company’s future rather than generating large car volume. To fund its plans, Tesla (TSLA) expects capex spending of over $20B in 2026.
Notably, Tesla (TSLA) outlined plans to halt Model S/X production and convert that Fremont capacity into an Optimus humanoid robot factory, targeting up to 1 million units annually over time, with meaningful volume not expected until late 2026. Musl also highlighted the upcoming Cybercab robotaxi, a steering-wheel-free vehicle slated to begin production around April and to be supported by an autonomous ride-hailing service operating without safety drivers in some cities. The development of Tesla’s (TSLA) in-house AI5 chip and the possibility of building a domestic Terafab semiconductor facility to mitigate long-term chip and geopolitical risks were also significant talking points.
Morgan Stanley lowered its price target on Tesla (TSLA) to $415 as it pointed to the elevated free cash burn amid the heavy spending plans. “With these changes we now expect TSLA to burn $8.1bn of FCF in 2026, moderating to $500mn in 2027, and returning to FCF positive in 2028,” wrote Andrew Percoco. The PT is broken down by Tesla’s (TSLA) various businesses: “Our base case is comprised of 5 components: (1) $45/share for core Tesla auto business on 8.5mm units in 2040, 9.8% exit EBIT margin (ex-FSD), 10.9% WACC, and 10x 2030 exit EBITDA multiple. (2) Network Services at $145/share, 80% attach rate at $240/month ARPU by 2040 (3) Tesla Mobility at $125/share on DCF with ~5mn cars at ~$1.33/mile by 2040. (4) Energy at $40/share and (5) Humanoids at $60/share (50% probability discount).”
RBC Capital kept a bullish stance on Tesla (TSLA) with an Outperform rating and price target of $500 unchanged. “For Tesla bulls, the capex step-up is expected and will facilitate the company’s path towards innovation. The robotaxi launch schedule is a welcome detail for investors keen on concrete timetables. Finally, while Tesla is focused on its humanoid path, we could envision a scenario where the company could make a strategic pivot to specialized form factors to satisfy demand,” updated analyst Tom Narayan.
Roth Capital analyst Craig Irwin suggested investors should buy Tesla (TSLA) on any weakness due to the various catalysts in play. “Catalysts will play a primary role in valuation, in our view, as investors discount implied longer-term details of served markets and the projected earnings power,” he updated.
Jefferies analyst Philippe Houchois issued a cool assessment of Tesla (TSLA) as the firm kept a Hold rating and $300 price target in place. “Outlook vague and low in numbers, except for a whopping $20bn capex for 2026 and beyond across 6 units. Multiple launch milestones are likely to be missed and undermine confidence in earnings. Funding may become a topic despite a $44B cash pile,” wrote Houchois.
On Seeking Alpha, fresh articles from analysts Anna Sokolidou, Bill Maurer, and Jonathan Weber were all on the bearish side.
Shares of Tesla (TSLA) were up 2.7% in premarket trading on Thursday.