As Tesla prepares to release its fourth-quarter earnings on the 29th, investor focus is shifting away from traditional financial metrics towards advancements in cutting-edge technologies such as robotaxis, unsupervised autonomous driving, the humanoid robot Optimus, and the AI5 chip. According to a recent Morgan Stanley research report, incremental updates on these technologies will dictate the stock price reaction, rather than conventional delivery figures or margin data.
Per the Chasing the Wind Trading Desk, a report from Morgan Stanley analyst Andrew S. Percoco's team on the 21st highlighted a significant divergence in market expectations for Tesla's 2026 financial key metrics. The institution forecasts Tesla's 2026 deliveries at 1.6 million vehicles, 9% lower than the market consensus and representing a 2.5% year-over-year decline. More strikingly, Morgan Stanley predicts Tesla will experience a $1.5 billion free cash flow burn in 2026, contrasting with the market consensus expectation of a positive $3.1 billion.
This pessimistic outlook stems primarily from the institution's belief that the market has not yet fully priced in a substantial increase in Tesla's 2026 capital expenditures. Morgan Stanley expects Tesla's 2026 automotive gross margin (excluding regulatory credits) to be 14.2%, below the market expectation of 15.0%, partly due to its cautious judgment on volume growth.
Regarding technological progress, the timeline for Tesla's launch of a robotaxi service without safety supervisors in Austin, Texas, is viewed as a key near-term catalyst for validating its autonomous driving technology and safety. Furthermore, the latest developments on the Cybercab, scheduled for production start in April 2026, along with the anticipated debut of the third-generation Optimus robot expected in February or March, will also become focal points for the market.
The rollout of robotaxis and Cybercab production are entering a critical phase. According to the Morgan Stanley report, Tesla's public launch of a robotaxi service without safety supervisors in Austin, Texas, is a crucial near-term catalyst for validating the technology and safety of its robotaxi platform. The institution expects Tesla to update the cumulative mileage data for its Austin robotaxi fleet during the earnings call, which is vital for gauging safety improvements.
Morgan Stanley assumes that Tesla's robotaxi fleet will reach a scale of 1,000 vehicles by the end of 2026. Notably, the Cybercab has been tested in multiple markets, including Austin, Texas; the California Bay Area and Fremont; Chicago, Illinois; and Buffalo, New York.
Production for the Cybercab is scheduled to commence in April 2026, and any updates on the production timeline will be closely watched. This vehicle, designed specifically for autonomy, is seen as a key product in Tesla's transition from a traditional automaker to a mobility service provider.
The path for unsupervised FSD deployment is becoming a key focus. The cumulative mileage of Tesla's Full Self-Driving (FSD) system is showing exponential growth. Report data indicates that FSD's cumulative mileage has grown from approximately 90 million miles in 2022 (averaging 150,000 miles per day) to about 7.4 billion miles currently (averaging 11 million miles per day in 2025). Concurrently, third-party reports suggest there has been a fairly significant improvement in FSD product quality.
Morgan Stanley believes the next major breakthrough will occur when Tesla can offer a more robust "eyes-off" experience (i.e., unsupervised FSD). The institution expects this to be rolled out in phases throughout 2026 and suggests that Tesla's decision to remove safety supervisors from its Austin robotaxis could be a precursor to the launch of unsupervised FSD for personal vehicles.
Tesla's recent decision to shift FSD to a subscription-only service may signal the upcoming launch of tiered FSD products and pricing strategies. Morgan Stanley assumes the global FSD subscription rate will increase from the current approximately 12% to 17.5% by year-end. The approval and rollout of unsupervised FSD in Europe and China will be critical factors for driving long-term penetration increases. This functionality is crucial for supporting Morgan Stanley's assumption of 17.1% vehicle sales growth in 2027.
Updates on AI chips and the Optimus robot are imminent. Morgan Stanley expects Tesla to provide updates on the progress of its AI5 chip design during the earnings call, along with how its chip projects and computing power investments will evolve over time, including projects like AI6+ and Dojo.
Tesla has previously stated it will debut the third-generation Optimus humanoid robot in February or March 2026. This is increasingly becoming a significant component of the Tesla story and its valuation. Following the密集展示 (dense showcasing) of humanoid robot products at this year's Consumer Electronics Show (CES), the market will closely monitor the latest information on the product debut timing and production start.
Under its base-case scenario, Morgan Stanley assigns a $60 per share valuation to the Optimus business (applying a 50% probability discount). In a bull-case scenario, the valuation for this business could reach $225 per share (0% probability discount).
The synergistic effects of Musk's business empire are drawing attention. The report notes that the integration of Musk's other ventures with Tesla has come more clearly into view. The market anticipates updates from the company on how these businesses might achieve synergies in the future.
Morgan Stanley maintains an "Equal-weight" rating on Tesla with a $425 price target, while the current stock price is $431.25. The institution's price target comprises five parts: $55 for the core auto business, $145 for network services, $125 for mobility services, $40 for the energy business, and $60 for the humanoid robot.
In a bear-case scenario, the institution provides a $145 price target; whereas in a bull-case scenario, the target could reach $860. This vast valuation range reflects the uncertainty surrounding Tesla's transformation from a traditional automaker into an artificial intelligence and robotics company.
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