Stifel analyst Stephen Gengaro has raised Tesla’s price target for the second time in just over a month, citing progress in both the Full Self Driving (FSD) software and on the robotaxi rollout, despite concerns about demand after the expiration of the EV Tax Credit.
The firm increased its price target on the Elon Musk-led company by 5% to $508 per share, implying a potential upside of 25.6% based on Friday’s closing price.
On October 8 — a day after the release of FSD V14 — Gengaro had already raised the target from $440 to $483, citing growing confidence in Tesla‘s FSD technology and the expanding Robotaxi business.
Over the past month, Tesla‘s stock has been volatile, hitting a new yearly high of $474.07 on November 3 before dropping to $380.97 on last Friday’s pre-market session.
The stock then rebounded and closed at $404.35.
Autonomy
In a new research note, obtained by PriceTarget, Gengaro said he sees continued progress in the Robotaxi front, with management planning to expand to “roughly 8-10 metropolitan areas by year-end.”
The analyst further noted that Tesla expects to remove safety drivers in Austin until the end of the year, as reiterated by CEO Elon Musk in the Annual Shareholder Meeting earlier this month.
The Robotaxi service is currently being offered using modified Model Ys equipped with a modified version of the FSD.
While Tesla is working toward an unsupervised version, it recently released the Version 14 of FSD (Supervised), the “second biggest update ever” since V12, according to Musk.
Analyst Stephen Gengaro noted that Tesla plans to add “reasoning capabilities” in versions 14.3 or 14.4.
Musk has previously stated that the vehicles would be sentient by version 14.2.
Another positive for Stifel on Tesla‘s outlook is the Optimus humanoid, in which “Elon Musk remains very optimistic.”
The CEO announced earlier this month that 1 million Optimus units will be built in Fremont, while 10 million units are planned for production in Texas yearly. Mass production is expected to kick off in 2027.
Since then, the company has reportedly started construction of the new factory for its Optimus humanoid robot on the Giga Texas facility.
Demand and Deliveries
As the federal EV tax credit expired on September 30, Tesla flagged that it could have a few “rough” quarters ahead, already during the second quarter earnings call in August.
Gengaro admits that the firm “had baked in some third quarter demand pull forward into [their] model,” while fourth quarter deliveries might be lower than initially expected.
At the same time, Tesla introduced more affordable trims for its best-selling Model 3 and Model Y, which the analyst highlighted as a “response to the expiration of the EV tax credit in the United States.”
“We believe these vehicles could soften the impact of the EV tax credit expiration,” he noted.
However, just a month after their debut, demand concerns are emerging for the new Standard iterations, as the first inventory units of the Model 3 and Model Y Standard are already appearing on the website.
These vehicles, which have had several key features removed, have only reduced the standard price by $5,000 — a smaller-than-expected discount.
Despite progress in autonomy, Tesla‘s revenue still comes mostly from automotive sales, which represented $20 billion out of a $25.1 billion revenue in the third quarter.
Stifel has increased its 2025-2026 EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) Forecasts to $14,859 billion and $19,489 billion from $14,483 billion and $16,884 billion, respectively.
