Bank of America Resumes Coverage on Tesla & Rivian; Sets Stock Targets

Bank of America has resumed analyst coverage of both Tesla and Rivian, issuing markedly different outlooks for the two U.S. EV manufacturers.

The firm is notably optimistic about Tesla’s software and robotics trajectory, while cautioning that Rivian faces near-term profitability challenges amid shifting regulatory conditions.

Tesla: autonomy and robotics drivers

Bank of America reinstated coverage on Tesla with a Buy rating and a $460 price target, versus trading around $403 today. The bullish case centers not only on vehicle manufacturing but also on Tesla’s lead in artificial intelligence and software.

Analysts called out Tesla’s FSD as the leading consumer autonomy solution. They also emphasized that Tesla’s camera-only strategy—though harder to solve—is far cheaper to produce than the costly, multi-sensor hardware stacks used by much of the autonomous driving sector.

With lower-cost hardware, Tesla is positioned to scale its upcoming Robotaxi network more profitably and faster than rivals, supported by a large and growing data engine from the millions of Tesla vehicles already on the road.

By the bank’s estimates, Robotaxi and autonomy account for roughly 52% of Tesla’s total valuation. Beyond autos, Bank of America also sees upside in the expanding Tesla Energy business and in the potential commercialization of Tesla’s humanoid robot, Optimus.

Rivian: regulatory headwinds and profitability risks

Bank of America reinstated coverage on Rivian with an Underperform rating and a $14 price target. The shares, however, are up 6% today to almost $17 ahead of Thursday’s R2 event, and broader analyst estimates are closer to $17.

The bank’s more cautious stance is tied to a rapidly changing regulatory landscape. According to its note, Rivian’s fourth-quarter automotive revenue fell 45% year-over-year, driven by a $270 million drop in regulatory credit sales and softer demand for the R1 after the US federal EV tax credit expired in late 2025.

Rivian has several strategic initiatives underway, including the launch of the more affordable R2 platform, with deliveries targeted in Q2 2026, but Bank of America remains skeptical.

The firm argues that the current regulatory backdrop makes near-term profit improvement unlikely, regardless of R2 execution. It concludes that Rivian’s stock is priced for a recovery that the fading regulatory environment will not deliver on schedule.