To The Moon

NEWS: Canaccord Genuity analyst George Gianarikas has increased his $TSLA price target to $490 (from $333), with a BUY rating.

His reasons:

• Raising deliveries: "In our note, we discuss the data we pull from ~30 countries that led us to increase our delivery estimates. After several quarters of weakening momentum, this is a positive break in trend."

• New models: "Next, on the EV side, we expect more new models soon – as promised by management. These should help global sales momentum – and potentially help alleviate any post-3Q cliff in the US after EV tax credits go away. And these new vehicles should be interesting."

• Energy storage mo': "In energy storage, we expect an improvement in momentum. We, the world, need more power, and we need more storage for both utilities and data centers. Hyperscaler data centers are looking for power that is not fully tied to the grid: “behind the meter” or distributed generation solutions that supply power directly to an onsite property but are still typically connected to the main utility grid. Fully using grid resources not only takes significant time and effort but is increasingly met with resistance from utilities and consumers as they express concerns about increasing power prices and impact on grid resiliency. Elon Musk himself used behind-meter solutions like methane gas turbines and generators in Memphis to build his xAI facility – although next time he should be careful not to pollute the environment when he does it. Energy storage will play a material role in behind-the-meter solutions."

• The comp package: "Then, there’s the new comp package – through which Elon Musk has committed to stay with Tesla for the long haul, with the board putting aggressive targets in place that could potentially make Mr. Musk a trillionaire. More detail in our note. Those targets, if achieved, promise great returns for Tesla shareholders. Embedded in the upcoming shareholder vote is an opportunity for Tesla shareholders to potentially invest in xAI as well. Given Mr. Musk’s singular business achievements, we see his commitment to the company and bold targets as – mostly -a positive. $400B in EBITDA. Yowza. That’s one of Mr. Musk’s operational targets over a 10-year period and compares to ~$15B TTM as of 2Q25. Mr. Musk is who he is, and it is hard to underestimate him. But, a lot needs to go right for him to achieve it. And, in our opinion, we are at a phase in Tesla’s growth cycle where it must go through a period of creative destruction to achieve those goals.

Here’s why: humanoids aside, the more success Tesla has in robotaxi, the fewer vehicles they will sell; and we think the company knows this, as they laid out a target of only 20M cumulative vehicle sales as an operational target. Since Tesla has delivered ~8M vehicles to date, that requires only an additional ~12M units delivered. That’s not a lot over 10 years considering we model ~1.67M in 2025. We applaud management for its willingness to sacrifice growth in its core segment to vault to the next level. Still, it is not risk-free and, in our opinion, will demand substantial robot sales to succeed. In our note, we lay out how aggressive these targets may be in the context of a nascent market for humanoid robots and the cannibalizing nature of the robotaxi market."

Conclusion: "So, this wasn't an easy one. The potential for a downgrade was high as we weighed the tailwinds and headwinds to earnings. Not to mention struggling with valuation. However, with some momentum in near-term estimates, potential for more new EVs, a continued expansion of the robotaxi ODD and the possibility of transformative developments in humanoid robotics - we are reiterating our BUY rating and raising our price target to $490."