Tesla Stock Rises as Giga Austin Visit Makes BofA Bullish

Tesla (TSLA) shares rose sharply on Thursday on optimistic comments from BofA Securities after the company’s analysts just completed a factory visit to Giga Austin.

“The trip made us more confident that TSLA is well-positioned to grow in 2025+ with its core electric vehicle business and the launch of its robotaxi offering, as well as longer-term with its investments in Optimus,” senior analyst John Murphy wrote in a Note to investors.

Murphy reiterated his Buy rating on Tesla and increased his price target from $350 to $400. Tesla shares rose 3% in midday trading.

After the factory visit, Murphy and BofA claim that the first big driver for Tesla is the prospect of an upcoming low-cost electric vehicle, which Tesla says is expected to launch in the first half of 2025.

Murphy expects the new vehicle to increase Tesla’s TAM (Total Addressable Market), cost less than $30,000, and due to factors such as “relieving load, increasing the efficiency of the engine and thereby allowing for a smaller battery and replacement of the battery.” Interior will benefit from lower costs, among other things. According to previous statements from Tesla, Murphy is confident that the low-cost model will not be the only new model in 2025.

BofA and the team are also optimistic about Tesla’s latest Full Self-Driving (FSD) software, which is currently in beta.

“The Cybertruck and Model Y we were driving … drove seamlessly to a charging station several miles away despite unusual road conditions, drove on roads that were under construction, and made hard left turns against traffic,” Murphy wrote, pointing out indicates that the minimal intervention of a human driver suggests that the monitored launch of Tesla’s robotaxi business is imminent.

Murphy said a shift toward growing software-based products like FSD would also improve margins.

Tesla has said it plans to expand its robotaxi testing next year, and CEO Elon Musk predicted during the third-quarter earnings call that the Cybercab would reach mass production in 2026, with the company targeting 2 million Cybercabs per year.

One of Murphy’s more interesting points has to do with Tesla’s humanoid robot Optimus. According to Murphy, Tesla is currently using Optimus to sort Tesla’s battery cells without intervention and is testing Optimus’s dexterity using use cases such as catching tennis balls.

Tesla has said it plans to have 1,000 Optimus robots in use at Giga Austin by the end of 2025, and Murphy believes robot training will accelerate as the “computing power” of Tesla’s supercomputers shifts to Optimus development, while Tesla’s robotaxi- Technology is mature.

While Musk has said that Optimus will be Tesla’s biggest product to date with a staggering $200 trillion in total revenue, Murphy would only go so far as to say that the cost of Optimus will decrease as its capabilities improve, with production will increase in 2026 and beyond.

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