TLDR
- Morgan Stanley raised its Q2 Tesla delivery forecast to 413,000 vehicles, above the Wall Street consensus of 406,000
- Tesla Europe registrations jumped 107.9% year-over-year in June; China domestic sales surged 82% from April
- Morgan Stanley maintained a Hold rating with a $415 price target, citing energy storage concerns
- Elon Musk tweeted that Tesla is rolling out new FSD hardware for AI3 owners, potentially driving $99/month subscriptions
- Tesla and SpaceX ties are deepening, with joint AI and semiconductor projects underway; Wall Street speculates on a merger in the next 12–18 months
Tesla (TSLA) stock was trading up around 1.22% Monday, with premarket gains of 0.7% putting the price at $382.38 — and a fresh note from Morgan Stanley giving bulls something to talk about.
Morgan Stanley analyst Andrew Percoco raised his Q2 delivery estimate for Tesla to 413,000 vehicles, up from a prior estimate of 373,000. That puts him above the Wall Street consensus of 406,000.
The revision is driven by a solid recovery in Europe and China, two markets that had weighed on Tesla’s results over the past year.
In Europe, Tesla registrations rose 47% year-over-year in April. Preliminary June data showed registrations jumping 107.9% year-over-year to 28,610 units, per the European Automobile Manufacturers’ Association.
China also turned a corner. Domestic sales climbed 23% year-over-year in May and surged 82% from April, ending two straight months of annual declines.
Tesla is set to report its Q2 delivery numbers on July 2. Analysts on FactSet are projecting around 409,000 vehicles, up from the 384,000 delivered in Q2 2025.
Despite the upgraded forecast, Percoco kept his Hold rating and a $415 price target — about 9.3% upside from current levels. He flagged Tesla’s energy storage business as a concern, pointing to project delays in Q1.
Energy Storage a Soft Spot
Percoco expects Tesla to deploy 11.8 GWh in Q2, well below the Street’s estimate of around 14.3 GWh. He does expect a pickup in the second half of the year, projecting full-year deployments of around 55 GWh — in line with broader market expectations.
The broader analyst community remains split. On TipRanks, TSLA holds a Moderate Buy consensus based on 11 Buys, 15 Holds, and 3 Sells. The average price target sits at $403.49, implying about 6.3% upside. Year-to-date, the stock is down 15.6%.
Monday’s gains got a boost from the wider market, with S&P 500 and Dow futures up 0.7% and 0.3%, respectively.
FSD Update and SpaceX Ties
Elon Musk also added some noise over the weekend. He tweeted that Tesla is rolling out an updated version of its Full Self Driving hardware to owners running AI3 — the onboard computer introduced in 2019. The upgrade is notable given AI3 has roughly 15% of the memory bandwidth of the newer AI4 system.
For Tesla, it opens a door: AI3 owners may now have more reason to pick up a $99/month FSD subscription.
Musk also pointed to SpaceX’s Grok 4.5 AI model being used across both Tesla and SpaceX, underscoring the growing operational overlap between the two companies. The pair are collaborating on AI applications using idle Tesla computing power, and are jointly building a semiconductor facility called TeraFab.
Wall Street has been speculating about a potential Tesla/SpaceX merger in the next 12 to 18 months. SpaceX completed what was the largest IPO in history in early June.
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