Tesla(US:TSLA) First Shanghai Securities·2026-02-07 00:25Investment Rating - The report maintains a "Buy" rating for Tesla with a target price of $520.00, representing a 23% upside from the current price of $421.90 [3][5]. Core Insights - Tesla is accelerating the expansion of its Robotaxi fleet and moving towards large-scale AI and autonomous driving solutions. The Cybercab, designed for fully autonomous driving, is set to begin production in April 2026, which is expected to significantly optimize cost per mile and increase utilization [5][29]. - By the end of 2026, Tesla aims to have its Robotaxi service operational in 25-50% of the U.S. market, with over 500 vehicles already deployed in the Bay Area and Austin [5][29]. - The company is transitioning to a subscription model for its Full Self-Driving (FSD) service, which currently has nearly 1.1 million paid users, representing a 12% penetration rate among existing vehicles [5][35]. - Tesla plans to invest $2 billion in xAI to enhance its AI capabilities, which will integrate with its vehicle ecosystem [5][31]. Financial Summary - For the fiscal year ending December 31, 2024, Tesla's total revenue is projected to be $97.69 billion, with a slight decrease of 0.95% from the previous year. Revenue is expected to grow significantly in the following years, reaching $176.92 billion by 2028 [4][36]. - Non-GAAP net profit for 2024 is estimated at $7.96 billion, with a projected increase to $17.92 billion by 2028 [4][36]. - The report indicates that Tesla's automotive gross margin is expected to recover to 17.9% in the fourth quarter, with a focus on improving production efficiency and cost management [10][12]. Production and Capacity - Tesla plans to cease production of the Model S and Model X in early 2026 to repurpose the production lines for the Cybertruck, with a long-term production target of 1 million units annually [5][26]. - The Cybercab is expected to become the highest volume model in the long term, although initial production ramp-up may be slow due to the use of new customized components [5][29]. - Tesla's global production capacity is projected to exceed 2.35 million units, with significant expansions planned in Texas and Nevada [5][26]. Valuation - The report employs a discounted cash flow (DCF) model, estimating Tesla's revenue for 2026 to 2028 at $114 billion, $141 billion, and $176 billion, respectively. The calculated fair stock price of $520.00 corresponds to a 166x multiple of projected Non-GAAP earnings per share for 2026 [5][33].