Tesla’s Much-Awaited Cybercab Launch Is Here — Morgan Stanley Says One Thing Could Decide TSLA Stock Reaction

Morgan Stanley said if the EV maker puts only a limited number of vehicles on the road, shares could sell off through the launch event.

• Morgan Stanley reiterated an ‘Equal Weight’ rating and a $400 price target, implying a 12% upside.
• The brokerage said a broader rollout that meaningfully increases Tesla’s robotaxi fleet could drive the stock higher.
• Sales of China-made Model 3 and Model Y vehicles rose 3.6% in August, but represented a sharp contrast to July’s 38% growth.

Tesla (TSLA) was in the spotlight on Wednesday ahead of the EV maker’s highly anticipated Cybercab launch event in Texas on Thursday, as Morgan Stanley highlighted a key element that could trigger the stock’s movement.

Morgan Stanley reiterated an ‘Equal Weight’ rating and a $400 price target on Tesla, according to Investing.com. This implies a 12% upside potential from current levels.

At the time of writing, TSLA stock edged 0.4% higher in pre-market trading.

Morgan Stanley Says Limited Number Of Cybercabs Could Hurt TSLA Shares

Analyst Andrew Percoco said past company events have produced mixed reactions in the stock, with evidence of actual commercial deployment often making the difference. He laid out two possible scenarios for Thursday’s event.

If Tesla simply unveils the Cybercab and puts only a limited number of vehicles on the road, the firm expects shares could sell off through the event. However, a broader rollout that meaningfully increases Tesla’s robotaxi fleet could drive the stock higher. The brokerage is heading into the event with a “positive bias.”

Morgan Stanley said recent Texas DMV data showed Tesla had registered about 40 more Cybercabs, suggesting a larger rollout could be coming. Texas requires commercial operators of Level 4 or Level 5 automated vehicles to hold a DMV authorization and keep an active vehicle. The firm said this could signal preparations for a larger rollout.

Tesla launched its paid Robotaxi service with Model Ys in Austin in June 2025 and has since expanded into other markets across Texas.

China Growth Slows In August While European Data Is Mixed

The Cybercab event comes as Tesla’s traditional EV business continues to show uneven trends across key markets. Sales of China-made Model 3 and Model Y vehicles rose 3.6% year-over-year to 86,166 units in August, according to a Reuters report on Wednesday.  While this marked the tenth straight month of growth, it marked a sharp fall from July’s 38% jump.

European data was also mixed in August. Registrations jumped 279% in France and 104% in Denmark, while falling sharply in markets including Norway, Spain, Sweden, Portugal and Italy.

Retail’s Take On TSLA

While retail sentiment surrounding TSLA on Stocktwits remained ‘bearish’ over the past 24 hours

One user said Tesla’s “catalysts keep stacking up.”

View this Stocktwits post

TSLA is the worst-performing Mag 7 stock this year, declining nearly 19%.

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