Morgan Stanley Maintains Tesla Price Target Amid Delivery Miss

Tesla stock has faced recent downward pressure following a first-quarter delivery miss and a decline in energy storage deployments, prompting a cautious outlook from investors [1]. Despite these headwinds, Morgan Stanley analyst Andrew Percoco has reiterated an equal-weight rating on the stock while maintaining a $415 price target [1].

Key takeaways

• Tesla delivered 358,023 vehicles in Q1 2026, falling short of both Wall Street estimates and the company’s own projections [1].
• Energy storage deployments dropped to 8.8 GWh, a 15.4% year-over-year decline that Morgan Stanley attributes to project timing rather than a fundamental slowdown [1].
• Tesla’s current days' inventory ratio of 61.01 sits above its 10-year median of 57.82, signaling a potential buildup of unsold vehicles [1].
• Morgan Stanley views the scaling of an unsupervised Robotaxi fleet as the primary catalyst for Tesla’s future valuation [1].
• While Tesla’s Full Self-Driving (FSD) fleet is approaching 10 billion cumulative miles, Morgan Stanley notes that rising capital expenditures and negative free cash flow require clearer evidence of progress toward unsupervised autonomy [2].

Navigating Near-Term Operational Hurdles

The recent market skepticism stems from a Q1 performance that trailed expectations across multiple segments. Tesla produced 408,386 vehicles during the quarter but delivered only 358,023, leaving an inventory surplus of over 50,000 units [1]. While the energy storage business has historically been a consistent performer, the latest figures showed a decline to 8.8 GWh, missing the consensus estimate of 14.4 GWh [1]. Morgan Stanley argues that this segment's weakness is likely a result of project timing, noting that the broader demand for utility-scale storage and data center integration remains robust [1].

From a technical standpoint, the stock has struggled, trading below its 10-, 50-, 100-, and 200-day moving averages [1]. Valuation remains a point of contention as well; Tesla’s forward price-to-earnings ratio of 171.41 significantly exceeds the sector median of 15.03 [1]. Analysts remain divided on the path forward, with price targets ranging from a low of $125 to a high of $600 [1].

The Autonomy Pivot

Morgan Stanley emphasizes that the long-term investment case for Tesla hinges on its ability to successfully deploy an unsupervised Robotaxi fleet [1]. The company is currently working through specific operational challenges, such as refining pickup and dropoff functions, which the firm believes are solvable with further data collection [2].

Tesla’s transition to its next phase of autonomy is tied to the release of FSD version 15, which CEO Elon Musk has described as utilizing a significantly larger AI neural network than previous iterations [2]. While the rollout of Robotaxi services in Austin has progressed more slowly than some initial expectations, Morgan Stanley maintains that it is too early to conclude that the technology is ineffective [2]. Investors are now looking toward upcoming city launches expected by the end of June as a key indicator of whether the company can successfully scale its software-driven expansion [1].