Tesla (TSLA) is back at square one. After rocketing from $254 to $488 in just over a month after the presidential election, the Trump-fueled rally that pushed TSLA’s market cap to $1.6 trillion has since crashed 50% bringing the stock back to its starting point.
Elon Musk’s close ties failed to hold and the rally fizzled fast. Now, though, Morgan Stanley’s (MS) Adam Jonas is waving a bullish flag, calling for TSLA to hit $800 in the next 12 months – a 222% surge. Should investors hop aboard the Tesla train or avoid the trap?
Post-election, TSLA soared on the Musk-Trump bromance, with investors banking on his role in the Department of Government Efficiency (DOGE) and tariff protections. But reality hit hard: fourth-quarter deliveries slumped to 495,600 vehicles, a 5.5% year-over-year decline that missed growth targets. European sales tanked, China demand dropped 45%, and a partisan backlash wiped out gains. The stock is back to pre-election levels, and the EV market is cooling fast.
Jonas isn’t fazed. He sees Tesla morphing into an “embodied AI compounder,” not just a carmaker. His $800 call rests on AI breakthroughs, energy growth, and a robotaxi empire – some 7.5 million units by 2040, raking in $1.46 per passenger mile at 29% margins. A robotaxi unveil and Musk’s upcoming AI/Humanoid Day could light the fuse. His base case is $430, but $800 is a bet on software and services eclipsing EVs. It’s a $2.6 trillion vision, though not the same as Cathie Wood’s wild-eyed $2,600-by-2029 call.
Tesla, though, is stumbling. China’s sales slump and brand “degradation” hit hard, with analysts at Stifel saying Democrats’ have flipped on the EV maker and no longer view the brand favorably. Republicans, on the other hand, now love Tesla even more, but the split still stings.
Tesla is spending heavily on AI and its gigafactories while its “supervised” Full Self-Driving lags behind peers like Waymo, which was reporting 150,000 weekly paid trips in December. And Trump’s tariffs are inviting retaliation, threatening Tesla’s global supply chain. Jonas admits there is a $200 bear case to be made if these pile up.
At $248 today, a climb to $430 nearly doubles your money. An $800 price tag more than triples it. Even the consensus one-year analyst price target of $340 per share screams upside. But Musk is manic and the DOGE gig is taking up a lot of his time, creating “great difficulty” for him in running his many enterprises. Tesla’s first-quarter earnings report next month could be a make-or-break moment for the EV stock.
For the adventurous sort, buying now bets on the catalysts Jonas calls out reigniting the spark for new gains, but waiting is the smarter choice. Delivery trends and FSD clarity are weeks away. Morgan Stanley’s $800 is bold, but Tesla’s sales woes, brand rift, and tech hurdles make it a gamble, not a surefire reason to jump in today. Patience could mean dodging a bullet.
