Tesla Jumps As Analyst Highlights Growth In EVs, AI, Robotics

Tesla Inc. TSLA shares are trading higher Wednesday after Benchmark Equity Research initiated coverage with a Buy rating and a price target of $475.

What To Know: Analyst Mickey Legg highlighted Tesla's multiple growth opportunities across autonomous vehicles, robotics, and energy generation and storage. He also noted the continued proliferation of the EV market, driven by advancements in manufacturing and battery technology that have reduced market prices.

Legg emphasized the release of more affordable Tesla models in 2025 as a key catalyst for growth. The company plans to launch unsupervised full self-driving (FSD) as a paid service this June in Austin, Texas. Tesla's Optimus robot production ramp is expected to continue through 2026 and beyond. Legg's model only accounts for baked-in vehicle growth but sees significant potential upside should the Robotaxi and Optimus initiatives scale effectively.

The analyst views the Robotaxi program as a substantial opportunity for Tesla to build a self-sustaining ecosystem. This would involve Tesla owning and operating a fleet of self-driving cars, potentially repurchasing vehicles from existing customers as leases end or vehicles are traded in. Legg noted that Tesla's unsupervised FSD service, set to begin in June, could expand to additional locations if proven proficient.

The analyst also pointed out Tesla's ambitions with its Optimus robot, which management believes has a long-term potential exceeding $10 trillion. Even at lower production levels, this presents a multi-billion-dollar opportunity to lower auto manufacturing costs and drive down internal production expenses. Limited production of Version 1 is expected for internal use in 2025 with 10,000 robots slated for production by the end of the year. Version 2, designed for external customers, is scheduled for release in 2026.

On a macro level, Legg acknowledged that regulatory uncertainty and growing EV competition are creating downward pressure on vehicle pricing. However, he argued that Tesla's product breadth—including next-generation vehicle releases, unsupervised FSD, and the Optimus robot—will help address these headwinds.

Tesla's financial position also remains robust, with $36.5 billion in cash and investments. In the fourth quarter alone, Tesla generated over $2 billion in free cash flow and more than $3.5 billion for the full year. Legg sees these funds as a war chest for pursuing further growth opportunities.

TSLA Price Action: Tesla shares were up 2.4% at $336.51 on Wednesday, according to Benzinga Pro.

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