Top Tesla analyst Adam Jonas says Musk's China visit means 'he's back' and fully committed to EV maker

Published Mon, Apr 29 202411:49 AM EDTUpdated Mon, Apr 29 20241:14 PM EDT

Tesla CEO Elon Musk's recent visit to China to remedy roadblocks standing in the way of its Full Self-Driving effort signals that he's committed to the company through what has recently proven to be a tumultuous period, according to Adam Jonas, Morgan Stanley's head of U.S. auto research. "Elon Musk's visit to China means far more than seeking approval for self driving tech on Chinese roads. Whether Tesla's CEO is sleeping on a floor or on a plane... the message is clear: he's back," Jonas wrote in a report on Monday note. Jonas reiterated an overweight rating on Tesla stock, alongside a $310 per share price target, implying more than 82% upside from Friday's $169.29 close. Tesla jumped as much as 14.4% Monday following news of Musk's visit to China and meeting with Chinese Premier Li Qiang , as investors interpreted it as a sign of Musk's commitment to Tesla. Musk's focus on the electric-vehicle maker has been a lingering question since he assumed control of X, formerly known as Twitter, and took the social media platform private in 2022. Musk has also faced increased pressure from Tesla investors after his controversial compensation package was rejected by a federal judge in Delaware. TSLA YTD mountain Tesla stock. "Investor concerns around whether Elon Musk was 'all in' on Tesla have been weighing heavily on the stock since the compensation package was rejected by Delaware judge," Jonas said. "Even the smallest gesture of commitment (an unannounced trip to Beijing) has elevated meaning here, combating concerns over Musk's commitment to Tesla relative [to] the broader Musk ecosystem of companies," such as SpaceX, he said. To be sure, Musk's visit to China doesn't mean a breakthrough for FSD technology will come sooner. Musk had originally asserted that FSD would come to Tesla within two years in 2015 , 2016 and again in 2017 . But clearing the China hurdle represents a milestone in the company's effort to achieve FSD, as Beijing lawmakers previously considered banning Tesla FSD over security concerns . Tesla stock has faced increased pressure on several fronts in 2024 and has still slumped 22% even after Monday's rally. The company delayed a rollout of a more affordable $25,000 electric sedan, seen as a key initiative to help Tesla combat slower-than-expected EV sales. Despite missing the top and bottom lines in its latest quarter, the stock jumped after Musk signaled that production of a budget EV could start as soon as 2025. Musk did not provide more details when fielding questions on last week's earnings call, however.