Morgan Stanley has increased its Tesla second-quarter delivery forecast after vehicle sales showed stronger-than-expected improvement in Europe and China.
However, the investment bank remains more cautious about Tesla’s energy storage business and the timing of major deployment projects.
Tesla Deliveries Expected to Beat Market Forecasts
Morgan Stanley now expects Tesla to deliver approximately 413,000 vehicles during the second quarter.
That estimate is significantly higher than the bank’s previous forecast of around 373,000 vehicles. It also exceeds the market consensus of approximately 401,000 deliveries.
The upward revision followed stronger vehicle registration and sales figures across several important markets during April and May.
Tesla Sales Recover in Europe
Europe provided the largest positive surprise for Tesla.
Vehicle registrations were running well above the levels recorded during the same period last year. April also marked another month of recovery following the company’s weak performance across Europe in 2025.
The improvement suggests that demand may be recovering in a region where Tesla has recently faced stronger competition from established automakers and Chinese electric vehicle manufacturers.
China Demand Shows Signs of Stabilising
Tesla’s sales performance in China also improved during May.
Domestic sales increased compared with both the previous month and the same period last year.
The rebound ended two consecutive months of annual sales declines and indicated that demand in the Chinese market may be beginning to stabilise.
China remains one of Tesla’s most important markets, making the recent improvement a key factor behind Morgan Stanley’s higher delivery estimate.
US Tesla Sales Remain Softer
Tesla’s sales trends in the United States remained weaker than the previous year through May.
Despite this decline, regional data still suggested that US deliveries were likely to exceed Morgan Stanley’s earlier forecast.
As a result, stronger results in Europe and China are expected to more than offset continued softness in the US market.
Morgan Stanley Maintains $415 Tesla Price Target
Morgan Stanley kept its Tesla price target unchanged at $415 per share.
The bank remains less optimistic than the wider market about Tesla’s energy storage deployments during the second quarter.
Morgan Stanley expects Tesla to deploy approximately 11.8 gigawatt-hours of energy storage capacity.
That forecast is below the Wall Street consensus estimate of around 14.3 gigawatt-hours.
Energy Storage Project Delays Create Uncertainty
The cautious forecast reflects concerns about the timing of Tesla’s energy storage projects.
Several deployments were delayed during the first quarter, creating uncertainty over when those projects will be completed and recognised.
Nevertheless, Morgan Stanley expects energy storage activity to accelerate during the second half of the year.
The bank forecasts full-year deployments of approximately 55 gigawatt-hours, broadly matching current market expectations.
Stronger Deliveries Lift Tesla Earnings Forecast
Morgan Stanley also raised its Tesla earnings estimates following the improved vehicle delivery outlook.
The bank increased its second-quarter adjusted EBITDA forecast by 11%.
It also made modest upgrades to Tesla’s full-year revenue and profit estimates.
The revisions were mainly driven by higher expected vehicle volumes and slightly stronger automotive profit margins.
Tesla Shares Rise Following Improved Outlook
Tesla shares gained 1.2% on Friday to close at $379.71 after reaching an intraday high of $387.80.
The stock continued to move higher after the closing bell as investors responded to the improved delivery expectations.
Tesla’s upcoming delivery report will now be closely watched to determine whether the company can outperform market forecasts and maintain its improving momentum in Europe and China.
