Key Takeaways
- Morgan Stanley analyst upgraded Tesla’s Q2 delivery projection to 413,000 units, surpassing the Street consensus of 406,000 vehicles
- European registrations for Tesla vehicles skyrocketed 107.9% year-over-year in June; Chinese domestic deliveries jumped 82% from April levels
- Despite the optimistic delivery forecast, Morgan Stanley kept its Hold rating with a $415 target price due to energy storage headwinds
- CEO Elon Musk announced Tesla is deploying updated Full Self Driving hardware for AI3 system owners, potentially boosting $99/month subscription adoption
- Operational synergies between Tesla and SpaceX continue expanding through AI collaboration and semiconductor projects; merger speculation intensifies for 12–18 month timeframe
Shares of Tesla (TSLA) posted gains of approximately 1.22% during Monday’s trading session, with the stock reaching $382.38 in premarket activity following a 0.7% uptick — buoyed by an encouraging analyst note from Morgan Stanley.
Andrew Percoco, an analyst at Morgan Stanley, revised his second-quarter delivery projection for Tesla upward to 413,000 vehicles, marking a significant increase from his previous forecast of 373,000 units. This revised estimate now exceeds the consensus view from Wall Street analysts, which stands at 406,000 vehicles.
The upward revision stems primarily from impressive rebounds in both European and Chinese markets, which had previously pressured Tesla’s performance throughout the past year.
Across Europe, Tesla vehicle registrations grew 47% on a year-over-year basis in April. More recent preliminary figures for June revealed an even more dramatic surge, with registrations soaring 107.9% year-over-year to reach 28,610 units, according to data from the European Automobile Manufacturers’ Association.
The Chinese market similarly demonstrated strong momentum. Domestic deliveries in China increased 23% year-over-year during May and experienced an 82% monthly jump from April, breaking a two-month streak of annual declines.
Tesla plans to announce its official Q2 delivery figures on July 2. Consensus estimates from analysts tracked by FactSet point to approximately 409,000 vehicles, representing an improvement from the 384,000 units delivered during Q2 2025.
Notwithstanding the enhanced delivery outlook, Percoco maintained his Hold rating on the stock along with a $415 price target — suggesting potential upside of roughly 9.3% from current trading levels. His cautious stance reflects concerns about Tesla’s energy storage segment, which experienced project setbacks during the first quarter.
Energy Storage Segment Faces Challenges
Percoco’s model anticipates Tesla deploying 11.8 GWh of energy storage in Q2, falling considerably short of Street expectations around 14.3 GWh. However, he forecasts improvement during the latter half of the year, with full-year deployment projections of approximately 55 GWh — aligning with broader market consensus.
The analyst community shows mixed sentiment on Tesla shares. According to TipRanks data, TSLA carries a Moderate Buy rating based on 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% on a year-to-date basis.
Monday’s positive price action received support from broader market strength, with S&P 500 futures advancing 0.7% and Dow futures climbing 0.3%.
Full Self Driving Rollout and SpaceX Integration
CEO Elon Musk generated additional attention over the weekend with announcements regarding Tesla’s autonomous driving technology. He revealed via Twitter that the company is distributing an enhanced version of its Full Self Driving hardware to vehicle owners equipped with AI3 systems — the onboard computing platform launched in 2019. This upgrade carries significance considering AI3 possesses roughly 15% of the memory bandwidth available in the more advanced AI4 architecture.
From Tesla’s perspective, the hardware update creates opportunity: AI3 system owners may find increased value in subscribing to the company’s $99/month FSD service.
Musk also highlighted that SpaceX‘s Grok 4.5 artificial intelligence model is now being deployed across both Tesla and SpaceX operations, emphasizing the deepening technological integration between the two companies. The organizations are working together on AI applications leveraging unused Tesla computing capacity, and are jointly developing a semiconductor manufacturing facility named TeraFab.
Market observers have increasingly discussed the possibility of a Tesla/SpaceX combination occurring within the next 12 to 18 months. SpaceX recently completed what ranked as the largest initial public offering in history during early June.
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