The judiciary is under attack; Fannie Mae just added a cybersecurity engineer at SpaceX and social media group X to its board of directors (though he left two days later); and Cantor Fitzgerald’s former chair and CEO Howard Lutnick has been pushing Elon Musk’s Starlink to federal officials, mainFT reports:
In a private meeting in the Herbert Hoover building near the White House this month, Howard Lutnick told civil servants at the Broadband Equity, Access, and Deployment (Bead) programme to increase the project’s use of satellite connectivity — over fibre-optic cable — and singled out Musk’s provider, Starlink.
“He mentioned Musk by name, he asked if we had been talking with Elon,” Evan Feinman, who until Friday was the director of Bead, told the Financial Times in an interview.
“The clear thrust of his directive was to increase the amount of satellite being used regardless of any other considerations.”
Coincidentally, Cantor senior equity analyst Andres Sheppard on Wednesday upgraded Tesla to “overweight” from “neutral”, his change of view triggered, he says, by a trip to the car company’s Austin gigafactory and AI data centers earlier this week.
Cantor’s $425 12-month Tesla price target is unchanged, implying a roughly 88 per cent price rally from Tuesday’s closing price of $225.31.
To be fair, stranger things have happened, and Sheppard isn’t an outlier: despite or because of Tesla’s recent sell-off, the Street has turned marginally more bullish on the stock since the turn of the year, with Bloomberg data showing 34 “buy” recommendations on Wednesday compared with 29 in early January.
And despite slashing his deliveries and revenue estimates for 2025 and 2026, Sheppard says Tesla’s recent wobble provides “an attractive entry point” for investors who are *ahem* “comfortable with volatility” . . .
We become bullish on TSLA ahead of material catalysts Including: the introduction of Robotaxi segment (June 2025), rollout of FSD in China (started in 1Q25), rollout of FSD in Europe (we expect 1H25 pending regulatory approval), introduction of lower-priced vehicle in 1H25 (we expect initial price of ~$30,000 inclusive of tax credit), high volume production of Optimus Bot (2026), initial deliveries of Optimus to customers (we expect 4Q26E/1H26) and introduction of Semi Truck (we expect SOP in 2H25/2026).
For 2025, TSLA recently disclosed that it expects its automotive business to “return to growth”(produced and delivered 50% (grew ~113% in 2024). However, we expect Tesla’s automotive business growth to be partially offset by tariffs, and the likely removal the EV tax credit, both of which we expect will have a material impact to the industry.
We also expect a mild 1Q, driven by lower demand in Europe and increased competition in China, plus some negative sentiment from Elon’s polarizing politics. Recall revenues from China, and other regions accounted for ~21% and ~30% of total revenues, respectively, in FY24. Overall we are bullish after our factory visit, and after the recent market selloff and share underperformance. We see future revenue upside from FSD, Robotaxi, Energy Storage & Deployment, and Optimus Bots, to be fundamental to TSLA’s thesis over the long term
Bullish on Self-Driving: While Waymo is currently the market leader in autonomous ride-sharing in the U.S. (offers >150,000 trips per week across several cities), we believe TSLA can quickly capture market share once it introduces its cybercab. Waymo’s vehicles have reported >25M cumulative autonomous miles driven on public roadways as of 12/2024. TSLA on the other hand, has reported >3B cumulative autonomous miles driven (on supervised Full Self Driving FSD), as of January 2025. TSLA’s FSD software is currently priced at $8,000, or via a monthly subscription fee of $99. During the Tour, we test-drove Tesla’s latest FSD (v.13.2.8), and are encouraged ahead of commercialization of its robotaxi segment. Additionally, recall that President Trump’s Administration previously discussed plans to potentially establish a federal framework for self-driving vehicles in the U.S. If implemented, then we see Tesla as a major beneficiary.
Sheppard is clearly in a tricky position here: Lutnick’s increasingly close ties to Musk and Trump mean Cantor’s Tesla coverage will from now on invite accusations of cosiness.
Lutnick divested his business interests in Cantor Fitzgerald upon becoming Trump’s secretary of commerce precisely to avoid any potential conflicts of interest. His sons Brandon and Kyle were promoted to chair and executive vice chair at the same time.
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Elsewhere in Tesla sellside, Wedbush permabull Dan Ives has been wobbling. Here are a few extracts from a note he sent out late on Wednesday:
Tesla is Musk and Musk is Tesla….they are synonymous and attached together and cannot be separated. For the last 15 years Musk has guided Tesla through many challenges to build Tesla into the global brand it has become today. We have been there for the ride with many ups and downs and defended the stock again and again over the years as we have firmly believed Tesla is the best disruptive technology player in the world.
Lets call it like it is: Tesla is going through a crisis and there is one person who can fix it….Musk. If you agree or disagree with DOGE it misses the point that by Musk spending 110% of his time with DOGE (and not as Tesla CEO) since President Trump got back into the White House this has essentially turned Tesla into a political symbol….and this is a bad thing.
Who’da thunk it?
This is a moment of truth for Musk and there are 2 things Elon needs to do to end this crisis and make sure it does not snowball into a much more black swan event for the Tesla brand over the coming years. As someone who is a core bull and believer in the Telsa [sic] long term growth story…..I loudly urge Musk and the Board to step up, stop being silent, and help resolve this crisis forming at Tesla.
Sounds dramatic! What exactly is the plan, Dan?
The 2 Things Musk Must Do in the Next Few Months To Stop This Crisis
1) Formally announce Musk is going to balance DOGE and being Tesla CEO. Musk needs to make a statement and his actions speak louder than words. We would expect this to happen either before or during the 1Q earnings conference call in early May. Investors need to see Musk take a step back and balance his DOGE and Tesla CEO roles…if he does this the heat from Musk around DOGE will start to dissipate among most of the critics and this will leave a scar for Tesla,….but not permanent brand damage.
2) Give the roadmap and timing for the new lower cost vehicles to be released into the market in 2025 along with the unsupervised FSD roll-out in Austin in June. With a Model Y refresh, inventory issues, and a host of demand issues with Musk brand damage a worry…there is one person Tesla investors need to hear from…Musk.
Ah, right. The fix is for Musk to keep on doing what he’s doing. But it’s all about balance. Because “his actions speak louder than words”, Musk needs to also tell Tesla investors things they might want to hear, maybe on an earnings call.
In the meantime, downgrade to . . . ?
We maintain our OUTPERFORM and $550 price target and remain firmly bullish on Tesla….but Musk needs to change course here…Tesla’s future depends on it.
Great stuff.
(Addendum snark by Bryce Elder)
