Tesla (TSLA) Stock Climbs After Morgan Stanley Upgrades Q2 Delivery Estimates

TLDR

• Morgan Stanley analyst upgraded Tesla’s Q2 delivery projection to 413,000 units, surpassing the Street’s consensus forecast of 406,000
• European Tesla registrations soared 107.9% year-over-year in June; Chinese domestic deliveries jumped 82% compared to April
• Despite the upgrade, Morgan Stanley kept its Hold rating with a $415 target, expressing concerns about energy storage performance
• CEO Elon Musk announced Tesla is deploying updated FSD hardware for AI3 vehicle owners, potentially boosting $99/month subscription uptake
• Increasing operational synergies between Tesla and SpaceX fuel market speculation about a possible merger within 12–18 months

Tesla (TSLA) shares advanced approximately 1.22% during Monday’s trading session, with premarket activity showing a 0.7% gain that pushed the stock to $382.38 — buoyed by an encouraging analyst note from Morgan Stanley.

Tesla, Inc., TSLA

Morgan Stanley’s Andrew Percoco elevated his second-quarter delivery projection for Tesla to 413,000 vehicles, marking a significant increase from his previous 373,000-unit estimate. This revised figure exceeds the Street’s consensus forecast of 406,000 deliveries.

The upward revision stems from robust performance rebounds across Europe and China, two critical markets that had challenged Tesla’s growth trajectory throughout the previous year.

Across European markets, Tesla registrations increased 47% year-over-year during April. Preliminary data for June revealed an even stronger performance, with registrations skyrocketing 107.9% year-over-year to reach 28,610 units, according to figures from the European Automobile Manufacturers’ Association.

The Chinese market demonstrated similar momentum. Domestic deliveries expanded 23% year-over-year in May and experienced an 82% surge from April levels, reversing two consecutive months of year-over-year contractions.

Tesla plans to announce its official Q2 delivery figures on July 2. FactSet consensus estimates project approximately 409,000 vehicles, representing growth from the 384,000 units delivered during Q2 2025.

Notwithstanding the elevated delivery forecast, Percoco maintained his Hold rating alongside a $415 price objective — representing roughly 9.3% potential upside from current trading levels. The analyst highlighted Tesla’s energy storage division as an area of concern, citing project execution delays observed during the first quarter.

Energy Storage a Soft Spot

Percoco anticipates Tesla will deploy 11.8 GWh during Q2, falling substantially short of Wall Street’s approximately 14.3 GWh expectation. However, he projects acceleration during the latter half of the year, with full-year deployment forecasts around 55 GWh — consistent with broader market projections.

The analyst community shows mixed sentiment. According to TipRanks data, TSLA carries a Moderate Buy consensus rating derived from 11 Buy recommendations, 15 Hold ratings, and 3 Sell ratings. The average analyst price target stands at $403.49, suggesting approximately 6.3% upside potential. The stock has declined 15.6% year-to-date.

Monday’s stock performance benefited from positive broader market sentiment, with S&P 500 and Dow futures climbing 0.7% and 0.3%, respectively.

FSD Update and SpaceX Ties

CEO Elon Musk generated additional investor interest through weekend social media activity. He announced that Tesla is deploying an enhanced Full Self Driving hardware version to vehicle owners utilizing AI3 — the onboard computing system launched in 2019. The enhancement carries significance considering AI3 possesses approximately 15% of the memory bandwidth capacity compared to the advanced AI4 architecture.

For Tesla, this development creates opportunity: AI3 vehicle owners may now find increased value in adopting the $99/month FSD subscription service.

Musk additionally highlighted that SpaceX’s Grok 4.5 AI model is being deployed across both Tesla and SpaceX, emphasizing the expanding operational integration between these enterprises. The companies are partnering on AI development initiatives leveraging unused Tesla computational capacity, while jointly constructing a semiconductor manufacturing facility designated TeraFab.

Wall Street analysts have increasingly discussed the possibility of a Tesla/SpaceX merger materializing within the next 12 to 18 months. SpaceX finalized what became the largest initial public offering in history during early June.

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