Tesla Inc. shares surged over 5% on Monday after Morgan Stanley analyst Adam Jonas said the electric vehicle maker had effectively “solved” autonomous driving, sparking renewed investor optimism around the company’s self-driving and robotaxi ambitions.
The comments followed CEO Elon Musk’s recent claims that Tesla could remove safety drivers from its robotaxis in Austin, Texas, within two months—a development that Jonas called a potential “inflection point” for the company and the transportation industry.
Morgan Stanley turns bullish on Tesla’s self-driving breakthrough
Morgan Stanley’s Adam Jonas, a long-time Tesla bull, wrote Monday that “autonomous cars are solved,” clarifying that while the technology isn’t perfect, it is advanced enough to allow Tesla to operate driverless vehicles at scale in major metropolitan areas.
The analyst noted that Tesla’s robotaxi rollout could expand to eight to ten metro areas by the end of the year, citing Musk’s statements from the company’s third-quarter earnings call.
Jonas added that the only factor delaying Tesla from fully removing drivers is its “abundance of caution,” and suggested that no additional regulatory approvals are required to operate driverless vehicles in Texas.
He emphasized that Tesla’s progress in autonomy could have far-reaching implications, noting, “If you solve autonomy for cars, you solve autonomy for many other form factors of AI-enabled robotics — aviation, marine, weapons, etc.”
While bullish on the long-term implications, Jonas also highlighted that Tesla’s Full Self-Driving (FSD) feature remains a relatively small part of the company’s business, with only about 12% of owners currently subscribing to the service.
Morgan Stanley estimates that FSD adoption in North America is closer to 20%.
Tesla stock gains on optimism despite mixed fundamentals
Tesla’s stock rose 5.29% to $456.68 per share in New York.
The rally came after a muted reaction to Tesla’s third-quarter earnings last week, which saw shares fall 1.3% over the period.
Analysts attribute Monday’s surge to renewed enthusiasm following Jonas’s comments and the broader excitement surrounding Musk’s upcoming plans for the robotaxi network.
Despite the gains, some market watchers remain cautious.
CFRA analyst Garrett Nelson maintained a sell rating on Tesla after earnings, warning that management had not adequately addressed concerns about near-term earnings growth.
Nelson pointed to execution risks associated with upcoming projects, including the Cybercab, Semi, and Megapack 3, all expected to enter volume production in 2026.
Tesla’s stock continues to trade below its longer-term buy point of $470.75, according to MarketSurge charts, with investors now closely watching the company’s November 6 annual shareholder meeting.
Musk’s $1 Trillion pay package back in focus
Adding to investor attention, Tesla Chair Robyn Denholm sent a letter to shareholders on Monday, urging them to support Elon Musk’s $1 trillion compensation package, warning that failure to approve it could jeopardize the CEO’s continued leadership.
“We could not risk losing the best leader in the industry to put Tesla on top,” Denholm wrote.
The pay package has become a flashpoint among investors amid Musk’s increasing focus on artificial intelligence and autonomous technology.
As Tesla positions itself at the intersection of robotics and mobility, its success in fully deploying self-driving vehicles could define the company’s next chapter—and determine whether Jonas’s declaration that “autonomous cars are solved” holds true.
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