Following yesterday's Morgan Stanley downgrade of Tesla to equal-weight (price target $425), incoming analyst Andrew Percoco—who took over from Adam Jonas—highlights execution risks in autonomous driving and Optimus robots amid slowing EV growth and Chinese competition. Tesla shares slipped over 2% Thursday as valuation concerns mount.
Morgan Stanley analyst Andrew Percoco, succeeding Adam Jonas (now focused on AI firms), elaborated on the firm's first Tesla downgrade in two years. Building on slashed forecasts—10.5% delivery drop in 2026 and 18.5% lower cumulative volume through 2040—Percoco cited U.S. EV adoption slowdowns, protected so far by 100% tariffs on Chinese imports but vulnerable long-term.
High-valuation bets like Full Self-Driving (FSD)—Tesla's cost-effective camera-only system—and Optimus humanoid robot face hurdles. FSD must prove safety in poor weather (e.g., rain, snow) to regulators, lagging sensor rivals like Waymo. Chinese peers advance rapidly: XPeng plans mass production of its IRON robot by 2026 end.
With shares above $450 (P/E over 307), investor Michael Burry deems it 'ridiculously overvalued.' Bulls counter: Piper Sandler sees FSD nearing unsupervised driving; Deutsche Bank's Edison Yu favors robotaxi upside. Q2 2025 earnings signal prolonged U.S. EV weakness. Key tests: robotaxi safety-driver removal and Optimus production next year, per Elon Musk.
