Tesla premarket slide draws attention to Musk merger talk and a Morningstar valuation bump

Tesla shares were lower in premarket trading as investors weighed two competing indicates: an analyst upgrade tied to expectations for Full Self-Driving progress, and renewed controversy around Elon Musk’s remarks about potential dealmaking.

According to the report circulating in the market, Morningstar increased its Tesla fair value estimate to $475 from $450. The firm pointed to stronger adoption of FSD, Tesla’s Full Self-Driving software package that is marketed to drivers as a step toward more automated driving features. Morningstar also cited lower spending assumptions, a factor that typically improves valuation models by reducing expected near-term costs relative to revenue.

FSD adoption matters to Tesla’s valuation because the company frames software as a growing part of its long-term economics, and because investors often look for evidence that customers are buying upgraded driver-assistance capabilities rather than only purchasing vehicles. In this case, the valuation change was attributed specifically to FSD adoption strength and spending reductions, rather than to a broader demand rebound argument.

While the analyst note offered a more constructive view, the premarket tone also reflected a different storyline. The headline described Elon Musk’s merger talk as reportedly creating a “mess,” language that suggests investors may view the comments as adding uncertainty or distracting from execution. The report also referenced pushback from a Rivian executive, who urged Tesla to “stop doing these calls,” implying frustration with how Tesla leadership communicates about deals.

Rivian, a major electric-vehicle competitor, has often positioned itself around its own production ramp and software roadmap. The reaction described in the market post indicates that even outside formal transaction steps, executives at rival automakers may respond quickly when Tesla leadership raises merger-related possibilities in public.

In the same premarket package, the story juxtaposed the Morningstar valuation increase with the company-specific noise around merger-related remarks. The effect, in practical trading terms, is that short-term sentiment can swing even when longer-term valuation frameworks improve, especially when investors are focused on timing, credibility, and whether customer and production narratives remain stable.

The market post did not provide details on when or how any merger talks would occur, whether the comments were exploratory, or whether any formal discussions are underway. It also did not specify what “calls” the Rivian executive referred to beyond the urging to stop them, leaving unclear the context of the exchange and what, if anything, was said directly between the companies.

Investors watching Tesla next are likely to focus on whether the company can translate FSD adoption momentum into measurable reporting, and whether public leadership comments about deals continue to generate operational or competitive concerns rather than clarity. In the near term, Tesla’s stock could remain sensitive to both valuation updates from analysts and headlines driven by executive statements rather than by reported financial results.