Bank Of America Sees 11% Upside For Tesla Stock Despite EV Credit Phase-Out, Tariff Risks: 'Promise To Deliver Unsupervised FSD'
Bank of America has raised its price target for Tesla Inc. to $341, an 11% increase, citing confidence in Elon Musk's FSD ambitions despite challenges like disappointing deliveries and the phase-out of EV incentives. Analysts noted that Tesla faces more hurdles than competitors like GM and Ford, particularly with tariff risks and potential impacts on fourth-quarter sales. However, the company's Robotaxi operations in Austin bolster optimism for unsupervised FSD delivery by 2025. Tesla's Model 3 recently hit 3 million sales globally, despite a 12.6% YoY drop in U.S. sales in Q2 2025.
Bank of America BAC has raised its price target for Tesla Inc. TSLA stock as the investment bank is confident in Elon Musk's FSD ambitions.
Check out the current price of TSLA stock here.
What Happened: In a new investor note released by the bank on Monday, BofA analysts stated that the EV giant faced more challenges compared to companies like General Motors Co. GM and Ford Motor Co. F.
"Tesla is the most challenged among the three OEMs given disappointing deliveries, IRA incentives phasing out, and tariffs," analysts said before adding that the tariff exposure isn't "insignificant."
The analysts also said that the company's sales in the fourth quarter could be affected by the lack of IRA or Inflation Reduction Act incentives ($7,500 EV credit).
However, the analysts also said that the company's Robotaxi operations in Austin inspired confidence "on the promise to deliver unsupervised FSD by the end of 2025," and updated the Tesla price target to $341 from $305, an over 11% increase.
Why It Matters: The news comes as Piper Sandler analyst Alex Potter also hailed Tesla's Robotaxi operations as well as the company's plans to expand the service into Phoenix and the San Francisco Bay Area.
Tesla's FSD, however, could face increased scrutiny after President Donald Trump's NHTSA nominee, Jonathan Morrison, called for tougher oversight on autonomous driving in the U.S.
Elsewhere, Tesla recently announced the company's Model 3 sedan had reached the 3 million worldwide sales milestone, despite the company's U.S. sales dropping 12.6% YoY in Q2 2025, according to data.
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