Tesla’s $508 Target Backed by 20.1% Margins, $4.3B LG Battery Deal
Stifel retained its Buy rating and $508 target after Tesla’s 4Q25 gross profit hit $5.01B with 20.1% margins and nearly 1.1M paid FSD users. Tesla signed a $4.3B deal with LG Energy Solution for a 2027 Lansing LFP battery plant and displayed its Semi at a major industry meeting.
1. Company Earns 4Q25 Profit Beat
Tesla reported $5.01B in 4Q25 gross profit, exceeding the $4.04B forecast, and achieved 20.1% margins—a two-year high despite over $500M in tariffs and lower fixed cost absorption. The company now counts nearly 1.1 million paid Full Self-Driving customers, setting the stage for high-margin subscription revenue.
2. $4.3B Battery Plant Deal
Tesla and LG Energy Solution signed a $4.3B agreement to build a Lansing lithium iron phosphate prismatic battery cell facility, with production expected to begin in 2027. The plant will supply American-made cells for Tesla’s Megapack 3 energy storage systems, bolstering the domestic battery supply chain.
3. Semi Demonstration at Industry Meeting
At the Technology & Maintenance Council’s annual meeting, Tesla showcased its battery-electric Semi with a lower-roof fairing and highlighted its up to 500-mile range capability. The demonstration underscores Tesla’s advancing commercial trucking technology and supports broader EV adoption strategies.