Tesla Shares Surge as Musk Confirms Plans for Affordable EVs and Autonomous Ride-Hailing
Tesla’s stock rose over 2% on Thursday following CEO Elon Musk’s announcement that the company will introduce more affordable electric vehicle models in the first half of 2025 and begin testing an autonomous ride-hailing service in June.
Despite a challenging fourth quarter marked by shrinking margins and lower-than-expected revenue, investor optimism surged due to Musk’s vision for Tesla’s future. The company ended 2024 with its first annual delivery decline, but it expects renewed growth in 2025.
Morgan Stanley analysts noted that Tesla is transitioning from a pure automotive company to a diversified leader in AI and robotics. Additionally, hopes for a clearer regulatory environment under a potential second Trump administration have also driven market confidence in Tesla’s autonomous vehicle ambitions.
Musk revealed plans to conduct unsupervised tests of Tesla’s autonomous ride-hailing service in Austin, Texas, though details regarding its operation and pricing remain undisclosed. The stock price increase could add around $28 billion to Tesla’s market value.
At least 19 brokerages have raised their target price for Tesla stock, with a new median projection of $300. Analysts believe the anticipated launch of Tesla’s Full Self-Driving (FSD) technology and budget-friendly EVs are key growth catalysts. However, regulatory challenges in Europe and China remain hurdles for the company’s autonomous vehicle expansion.
Tesla has also increased its capital expenditure forecast, now expecting to exceed $11 billion annually over the next three fiscal years, highlighting its commitment to innovation and expansion.
