Tesla 2Q26 delivery expectations revised up, while near-term ESS outlook remains conservative

Overview

This report is Morgan Stanley's forward-looking update on Tesla Inc.'s 2Q26 deliveries and near-term energy storage deployments. The report raises its 2Q26 delivery estimate to about 413K units, mainly driven by Europe's recovery, improvement in China in May, and overall regional data coming in better than previously expected; at the same time, it maintains a conservative view that near-term ESS deployments will remain below consensus. Despite upward revisions to some 2Q26 and full-year 2026 earnings metrics, the report maintains its Equal-weight rating and $415 target price, believing that long-term optionality from AI, FSD, Robotaxi, and Optimus is broadly balanced against near-term automotive demand, execution, and valuation pressure.

Core views

The core views include: first, 2Q26 vehicle deliveries may exceed market consensus, with MSe at 413.2K units versus consensus of 401.1K units; second, improvements in Europe and China offset the weak year-over-year trend in the U.S., supporting delivery tracking above previous expectations; third, near-term ESS deployments face project timing risk, with 2Q26 below consensus, but the full-year 2026 expectation of 55GWh is close to consensus of 57GWh; fourth, 2Q26 total gross profit and adjusted EBITDA forecasts are raised, but full-year 2026 is only moderately revised upward; fifth, the $415 target price is unchanged, reflecting a balance between AI optionality, software services and Robotaxi potential, and near-term automotive headwinds plus a fairly full valuation.

Analysis framework

The report uses a combination of top-down and bottom-up approaches: it calibrates 2Q26 deliveries using regional registration and sales trends, updates financial forecasts with assumptions on model-level sales, average transaction prices, margins, and expenses, and breaks down the value of Automotive, Network Services, Mobility, Energy, and Humanoids through a segment-based valuation framework. The risk-reward section presents bull, base, and bear scenarios to show valuation ranges under different assumptions for long-term unit sales, EBIT margins, FSD/service penetration, Robotaxi fleet size, and probability discounts for Humanoids.

Methodology notes

• 盈利预测Morgan Stanley ModelWare

  Consistent forecasting framework

  The report states that, unless otherwise noted, all metrics are based on the Morgan Stanley ModelWare framework; e denotes Morgan Stanley Research estimates, and some metrics are based on consensus methodology.

• 估值SOTP/DCF

  Sum-of-the-parts and discounted cash flow

  The $415 target price is composed of five parts: Automotive, Network Services, Tesla Mobility, Energy, and Humanoids. The Automotive business uses 2040 unit sales, exit EBIT margin, WACC, and exit EBITDA multiple, while Mobility uses a DCF framework.

• 情景分析Risk Reward

  Bull, base, and bear scenarios

  The report provides a Bull Case of $826, a Base Case of $415, and a Bear Case of $131 to reflect differences in assumptions for long-term sales, margins, FSD/service penetration, Robotaxi scale, Energy growth, and Humanoids value.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• TSLA.US

  Core covered asset

  Strengths

  2Q26 delivery trends are better than previously expected, and the company has long-term optionality across AI, autonomous driving, software services, energy, and robotics.

  Weaknesses

  U.S. trends remain weak year over year, the automotive business faces demand and competitive pressure, and valuation is already fairly full.

  Comparison

  The rating remains Equal-weight, with a target price of $415 above the $375.12 closing price, but the risk-reward is viewed as balanced.

  Risks

  Deliveries missing expectations, margin pressure, regulation, execution, competition, China market risks, dilution, and valuation pullback.

• Tesla Auto

  Main revenue source and near-term delivery driver

  Strengths

  Data improved in Europe and China, and the 2Q26 delivery estimate was raised from about 373K units to about 413K units.

  Weaknesses

  The U.S. remained weak year over year through May, and competitive and pricing pressure in the auto industry persists.

  Comparison

  2Q26 automotive deliveries MSe 413.2K units, above consensus of 401.1K units.

  Risks

  Regional demand weakening again, price competition, model refresh timing, and gross margin coming in below expectations.

• ESS/Energy

  Energy storage deployment and part of long-term valuation

  Strengths

  The full-year 2026 deployment expectation remains around 55GWh, up about 18% year over year and close to consensus.

  Weaknesses

  The 2Q26 deployment estimate is below consensus, and project delays may continue from 1Q26.

  Comparison

  2Q26 ESS MSe 11.8GWh, below consensus of 14.3GWh.

  Risks

  Project timing delays, revenue recognition volatility, and gross margin and capacity ramp falling short of expectations.

• Network Services/FSD

  High-margin software and services optionality

  Strengths

  The report views Network Services as an important source of value, with a base-case valuation of $144/share.

  Weaknesses

  The value depends on long-term assumptions for FSD penetration, subscription ARPU, and user base.

  Comparison

  The base case assumes an 80% attach rate and $240/month ARPU in 2040; the bull case assumes a 90% attach rate and about $250/month ARPU.

  Risks

  FSD adoption, regulatory approval, technology progress, and consumer willingness to pay coming in below expectations.

• Tesla Mobility/Robotaxi

  Autonomous mobility business optionality

  Strengths

  The base case assigns a valuation of $125/share, reflecting the long-term potential of the Robotaxi fleet and revenue per mile.

  Weaknesses

  Commercialization timing, city rollout, and the regulatory path remain highly uncertain.

  Comparison

  The base case assumes about 5mn vehicles and about $1.33/mile; the bull case assumes an 8.5mn fleet and 30% EBITDA margin.

  Risks

  Delayed Robotaxi launch, FSD safety and regulatory constraints, and intensifying competition.

• Humanoids/Optimus

  Long-term robotics optionality

  Strengths

  The base case includes $60/share after a 50% probability discount, while the bull case could reach $208/share.

  Weaknesses

  The business model, mass-production capability, and real demand are still at an early stage.

  Comparison

  The bear case values Humanoids at $0/share, showing that this value is highly sensitive to execution and timeline.

  Risks

  Product R&D, cost, mass production, application scenarios, and competition falling short of expectations.

Key data

• 2Q26 delivery estimate413.2K unitsPrevious estimate was about 373K units; above consensus of 401.1K units.
• 2Q26 delivery YoY+7.6% Y/YAfter the upward revision, it shifts from the previously implied -2.8% Y/Y to year-over-year growth.
• 2Q26 ESS deployment estimate11.8GWhBelow consensus of 14.3GWh; the report remains conservative on project timing.
• Full-year 2026 ESS deploymentAround 55GWhApproximately +18% year over year, relatively close to consensus of 57GWh.
• New 2Q26 total revenue forecast$24.448bnRaised 7.3% from the old forecast of $22.788bn.
• New full-year 2026 total revenue forecast$96.395bnRaised 2.0% from the old forecast.
• 2Q26 adjusted EBITDA$3.798bnRaised 11.3% from the old forecast.
• Full-year 2026 adjusted EBITDA$15.418bnRaised 4.1% from the old forecast.
• 2Q26 automotive gross margin (excluding ZEV)17.3%Raised by 0.3 percentage points from the previous 16.9%.
• Target price and scenario range$415; Bull case $826; Bear case $131The target price is unchanged, and the risk-reward is still described as balanced.

Impact & implications

In the short term, if actual 2Q26 deliveries come close to or exceed 413K units, it could improve market expectations for the stability of Tesla's automotive demand, especially with signals of recovery in Europe and stabilizing demand in China. However, ESS coming in below consensus may limit the extent of near-term earnings upgrades, while weak U.S. demand, competition in the automotive business, and high valuation remain constraints. Over the medium to long term, the report still recognizes optionality from FSD, Robotaxi, Network Services, Energy, and Humanoids, but under the current rating believes these long-term opportunities are not yet sufficient to fully offset near-term automotive cycle and execution risks.

Risks

• Intensifying competition from traditional automakers, Chinese automakers, startups, and large technology companies in autos, autonomous driving, and robotics.
• Robotaxi, FSD, and Humanoids execution progress coming in below expectations.
• Regulatory restrictions affecting the commercialization of FSD, Robotaxi, or other autonomous-driving businesses.
• Changes in demand, competition, or the policy environment in the China market creating downside risk.
• Equity dilution or capital expenditure pressure affecting per-share value.
• Valuation is already fairly full; if long-term AI and software-services optionality is realized more slowly, the stock price may face pressure.
• ESS project timing delays causing short-term deployment, revenue, or margins to come in below expectations.
• Weak U.S. automotive sales trends may drag on deliveries and margins.

What to watch

• Whether the 2Q26 delivery data to be released next week comes close to or exceeds about 413K units.
• Whether Europe's registration recovery, improvement in China's domestic sales, and the weak year-over-year trend in the U.S. continue.
• Whether 2H26 ESS deployments accelerate as the report expects, and whether the full year reaches about 55GWh.
• Whether 2Q26 automotive gross margin (excluding ZEV) can reach about 17.3%.
• FSD adoption, progress in unsupervised FSD, and the pace of Robotaxi city launches.
• Potential product timing such as new model announcements, Roadster, multivan, and others.
• New battery cost milestones and improvements in manufacturing efficiency.
• Optimus-related announcements and commercialization visibility.
• Whether there are marginal changes in competition, regulation, China market, dilution, and valuation risks.