Published on June 24th, 2014 | by James Ayre1
Is Tesla Motors The World’s Most Important Automaker? Morgan Stanley Thinks So
June 24th, 2014 by James Ayre
Whatever you may think about that question, one of the most important financial services groups in the world, Morgan Stanley, apparently thinks so. Do you really want to argue with it about choosing an EV manufacturer?
While those of us involved in the green-tech fields can probably pretty easily see why someone would consider Tesla to be so important (it’s a trailblazer in quite a number of ways), it’s still interesting to see a group like Morgan Stanley take such a position. Though I guess a good part of that is no doubt coming from the current love affair between Wall Street and Elon Musk — perhaps less so than if Tesla’s actions were taken on their own.
The claim from Morgan Stanley comes to us via recent report authored by research analyst Adam Jonas.
Jonas explains it all bluntly: “Not even two years after the delivery of the first Model S, Tesla Motors has transformed from fledgling start-up to arguably the most important car company in the world. We are not joking. Tesla is also emerging as an emblematic force in America’s effort to foster high tech manufacturing job growth.”
While Tesla’s previous successes — from the Model S, to the supercharger network, to the car dealership wars, to the European market, etc — are all quite impressive when taken on their own, much of Jonas’ appraisal owes to the company’s potential for growth.
The LA Times provides more:
Five states are developing incentive packages to land Tesla’s proposed giant $5 billion “gigafactory” battery facility, a project that could create 6,000 manufacturing and technical jobs, Jonas said.
Including the battery factory and expanded auto production at its factory in Fremont, California, Jonas sees Tesla’s US employment rising from about 6,000 workers today to as many as 20,000 within seven years.
That would indirectly support more than an additional 100,000 U.S. jobs.
“GDP moving stuff,” as Jonas notes.
Of course Tesla’s future does bank pretty heavily on some rather ambitious (and perhaps risky) projects/undertakings, such as the Gigafactory. If there are development issues, the company could see a curb to its (so far) quite impressive growth.
But if everything goes according to plan…
As Jonas notes, coming to us via Market Watch: “The success of the Gigafactory holds the key for the development of an entirely new industry. If Tesla can achieve battery cost per kWH below $150 and defend the IP, there is significant potential for revenue streams not captured in our $320 price target.”
Interesting times. Given that Jonas’ price target is $320, and the stock is trading at about $237 right now — up from about $200 two weeks ago — it’ll be interesting to see what happens next.
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