Tesla Stock Reaches New High After Price Increase Announcement; Wall Street Boosts Tesla Target Prices

On December 13th, $Tesla (TSLA.US)$announced price increases for its Model S. Tesla's stock price surged over 4% overnight, reaching a new all-time high, with its market value increasing by $58.2 billion in a single day. News reports suggest that Trump's transition team recommended eliminating regulations requiring automakers to report accidents involving advanced driver assistance systems (such as adaptive cruise control). Analysts note that this is clearly beneficial for Tesla.

Currently, Wall Street's outlook on Tesla's future is increasingly optimistic. In recent days, institutions including Goldman Sachs, Deutsche Bank, Bank of America, and Morgan Stanley have raised their target prices for Tesla, citing Musk's close relationship with the Trump administration and Tesla's leading position in autonomous driving.

Tesla announced price increase on Friday

Tesla announced price increases for the Model S AWD from $74,990 to $79,990, and the Model S Plaid from $89,990 to $94,990 last Friday. These adjustments reflect Tesla's pricing strategy in response to changing market dynamics. It's worth noting that prices for Tesla's best-selling Model 3 and Model Y were not increased.

From January to November 2024, Tesla's cumulative sales in the North American market reached 553,100 units, mainly driven by Model Y and Model 3 sales.

In comparison, Model S and Model X sales are lower. The Model S, which saw the price increase, sells about 1,000 to 2,000 units monthly in North America, with cumulative sales of 14,400 units from January to November this year.

Therefore, analysts believe that the Model S price increase may not significantly impact Tesla's overall sales.

On the news front, recent documents show that Trump's transition team recommended eliminating regulations requiring automakers to report accidents involving advanced driver assistance systems (like adaptive cruise control).

This move could weaken the government's ability to investigate and regulate the safety of vehicles with autonomous driving systems. This reporting requirement is also opposed by Musk's Tesla.

It's unclear whether the Trump administration will act on the transition team's recommendations, which consider the regulation to collect "excessive" data. The regulation, established by the National Highway Traffic Safety Administration (NHTSA), aims to strengthen safety monitoring of autonomous driving and driver assistance systems through mandatory timely reporting of critical data.

NHTSA stated in response to requests for comment: "This order is a first-of-its-kind tool for timely collection of crash data involving Advanced Driver Assistance Systems (ADAS) and Automated Driving Systems (ADS), including ADS-equipped heavy trucks. The requirement has significantly enhanced NHTSA's oversight of potential safety defects, allowing it to learn of potential safety issues within a day."

Analysts suggest that revoking this order would clearly benefit Tesla. Tesla vehicles automatically collect relevant data through connected car technology and have reported nearly 1,600 related incidents to NHTSA. Analysis of NHTSA accident data shows that out of 45 fatal accidents reported by the National Highway Traffic Safety Administration as of October 15, 40 were related to Tesla.

Tesla's major move in China

Tesla's Chinese website launched a new vehicle function on Friday — Actually Smart Summon.

This feature is available for Tesla vehicles equipped with EAP (Enhanced Autopilot) or FSD (Full Self-Driving Capability). Tesla owners can operate their vehicles through the Tesla mobile app, allowing the car to automatically exit a parking space and drive to the owner's location or a designated spot on the phone, with the vehicle required to remain within the owner's line of sight during movement.

Tesla China stated that this feature will be pushed to owners through OTA remote software updates in the future.

Analysts believe that Tesla's Smart Summon feature, launched in the U.S. in 2019, has been continuously improved over time. The introduction of "Actually Smart Summon" in China highlights Tesla's approach to maintaining automotive technological competitiveness through wireless upgrades. As Tesla expands this feature to more markets, investors will be watching how it affects adoption rates, and subscription revenue.

Analysts' views on Tesla

Wall Street's outlook on Tesla's future is still optimistic. Institutions including Goldman Sachs and Morgan Stanley have raised their target prices for Tesla, citing Musk's close relationship with the Trump administration and Tesla's leading position in autonomous driving.

Morgan Stanley reaffirmed its "top pick" rating for Tesla in its latest report and raised its target price from $310 to $400. Goldman Sachs pointed out that the market is focused on Tesla's future potential, especially its opportunities in artificial intelligence, particularly its Full Self-Driving (FSD) software and the autonomous taxi Cybercab.

Furthermore, Wedbush analysts are even more optimistic, predicting that Tesla's market value could reach $2 trillion by the end of 2025. The analyst Dan Ives raised his now Street-high price target to $515 a share from $400 Sunday. His "bull case" is $650 a share. He noted that Full Self-Driving (FSD), autonomous driving technology, and the launch of Cybercab in early 2026 are key to Tesla's future growth.

Tesla plans to launch its autonomous taxi service in 2025. Wedbush analyst Dan Ives has previously stated in a report that services such as autonomous taxis will bring Tesla a multi-trillion dollar market opportunity.

Source: Bloomberg

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