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$200 next for Tesla stock? Robotaxi gets green light in China

$200 next for Tesla stock? Robotaxi gets green light in China

Elon Musk’s surprise visit to China at the tail end of April has proven rather impactful as it led to a string of revelations, agreements, and alleged agreements and helped the stock of his embattled electric vehicle (EV) maker, Tesla Motors (NASDAQ: TSLA) have a short-term substantial, but overall middling recovery.

TSLA stock 30-day price chart. Source: Finbold

The ramifications of the billionaire’s trip have seemingly continued emerging well into the second week of May, this time in relation to another of Tesla’s recent market-movers: the ‘Robotaxi.’

Indeed, Musk’s promise that Tesla will unveil the ‘Robotaxi’ – also known as the ‘Cybercab’ – immediately sparked excitement, which only grew on the rumors that the EV maker has reached a self-driving-focused mapping agreement with the Chinese technology giant. Baidu (NASDAQ: BIDU).

Why $200 may be next for Tesla stock

May 8 seemingly brought another exciting rumor pertaining to the autonomous cab as it would appear that Elon Musk, during his visit, proposed testing the ‘Cybercab’ in China to at least some level of approval and support from the People’s Republic officials.

If true, the development could prove highly bullish for Tesla – both on the business and the stock market side – given that, even disregarding the potential benefits for the ‘Robotaxi’ development, it would mean that the EV maker has deepened its ties with one of the biggest markets in the world.

Indeed, even without the development, analysts have been modestly bullish on Tesla’s prospects, with the firm’s overall price target standing at $183.03.

TSLA stock analyst ratings. Source: TradingView

Once the development is added, the most bullish prediction, assigned by Morgan Stanley (NYSE: MS), which runs as high as $310 – and constitutes a 74.34% upside given that Tesla price today stands at $176.95 – becomes increasingly plausible, as does a potentially looming surge toward $200.

Why $200 may not be next for Tesla stock

On the other hand, it remains far from guaranteed that such a surge is coming imminently – and even that it is coming.

For starters, despite Tesla’s most recent earnings report driving a major rally, it is worth noting that it failed to meet even the fairly bearish forecasts and came at the heels of a very weak deliveries report. 

Additionally, Tesla’s long-term prospects are somewhat dampened by quality concerns, best exemplified by the numerous issues recorded with the ‘Cybertruck’  mere months after it shipped.

Finally, the excitement surrounding the ‘Robotaxi’ might itself be a double-edged sword given that such a product would, presumably, take level 4 or level 5 autonomy – a technology not expected to arrive in earnest before about 2030.

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