Tesla (TSLA) Stock: Wall Street Stays Bullish While Senate Debates California’s EV Rules

TLDR:

Senate voting on measure to eliminate California’s emissions regulation waiver Tesla stock rising 0.7% in premarket trading to $337 despite political uncertainty Morgan Stanley reaffirmed Overweight rating with $410 price target California regulations influence Tesla’s zero-emission vehicle credits worth $2.9 billion Jack Hartung joining Tesla’s Board of Directors and Audit Committee effective June 1

---

Tesla investors are closely watching a pivotal Senate vote Thursday that could impact California’s ability to set its own air emissions standards, while Wall Street maintains a bullish outlook on the electric vehicle maker.

Tesla, Inc. (TSLA)

The Senate is expected to vote on a Congressional Review Act measure designed to eliminate a waiver granted by the Environmental Protection Agency. This waiver currently allows California to regulate its own air emissions.

The vote follows earlier action in the House, where lawmakers voted to nullify the “waiver of preemption” for California’s “Advanced Clean Cars II” regulations, which the EPA had posted in January.

California has regulated its air quality since the late 1960s. The state’s current Advanced Clean Cars II requirements mandate that roughly two-thirds of all vehicles sold in California must be zero-emission by 2030.

This is an ambitious target considering EVs account for only about 20% of California’s new car sales today. Nationwide, EVs make up just 7% to 8% of new car sales.

The political maneuvering has drawn criticism. Democrats have expressed frustration with Republicans bypassing Senate filibuster rules to advance the measure.

“The Republican plan would backfire,” said Senate Finance Committee Ranking Member Ron Wyden. “Partisan actions cut both ways.”

Market Response Remains Positive

Despite the regulatory uncertainty, Tesla stock appears relatively unaffected by the California air quality news. Shares were up 0.7% in premarket trading at $337 on Thursday.

Before Thursday’s trading, Tesla shares had gained almost 19% in May, suggesting investors may be focusing on other aspects of the company’s business.

One possible explanation for investor confidence is Tesla’s upcoming robotaxi service launch in Austin, Texas, scheduled for June. The success of this business depends more on Tesla’s AI-trained self-driving software than its electric motors and batteries.

JUST IN: Elon Musk officially unveils Tesla $TSLA self-driving Robotaxi. pic.twitter.com/Jr2v9t4tND

— Watcher.Guru (@WatcherGuru) October 11, 2024

Wall Street Maintains Bullish Stance

On Tuesday, Morgan Stanley reaffirmed its Overweight rating on Tesla stock with a price target of $410. The investment bank’s analysts believe upcoming events through the end of 2025 will strengthen investor confidence in Tesla’s importance beyond automotive manufacturing.

Morgan Stanley highlighted Tesla’s role in what they call the “Muskonomy” – the economic ecosystem surrounding Elon Musk’s ventures. With a market capitalization of $1.11 trillion and trailing twelve-month revenue of $95.72 billion, Tesla remains a major player in the automotive industry.

The rating reaffirmation followed an interview with Tesla CEO Elon Musk by CNBC’s David Faber at the Giga Texas facility in Austin. Morgan Stanley analysts considered Musk’s rare interview with financial media important for shaping investor perception of the company’s future direction.

Tesla’s financial health appears strong, with more cash than debt on its balance sheet and liquid assets exceeding short-term obligations.

Other firms maintain similar outlooks. Cantor Fitzgerald has kept its Overweight rating on Tesla with a price target of $425, citing positive developments including the upcoming Robotaxi launch and the introduction of a lower-priced vehicle in 2025.

In corporate governance news, Tesla has confirmed Jack Hartung will join its Board of Directors and Audit Committee, effective June 1, 2025. Hartung is transitioning from Chipotle Mexican Grill, bringing extensive financial leadership experience to Tesla.

The California emissions regulations have been financially beneficial for Tesla. The company’s zero-emission vehicle credit sales have generated approximately $2.9 billion over the past 12 months.

Regardless of today’s vote outcome, the battle over California emissions appears far from over. California has fought to maintain its regulatory authority in the past, and the current Senate vote represents just one step in what may be a lengthy political struggle.

The post Tesla (TSLA) Stock: Wall Street Stays Bullish While Senate Debates California’s EV Rules appeared first on CoinCentral.