Tesla Motors Inc (NASDAQ:TSLA) stock just keeps going higher and higher today thanks to hopes about the gigafactory and—most recently—a very bullish report from Morgan Stanley. The firm more than doubled its price target for the automaker.
Tesla to disrupt more than just the auto industry
Analyst Adam Jonas and his team continue to rate Tesla Motors Inc (NASDAQ:TSLA) as Overweight. In their latest report, they note that the company is not only disrupting the trillion dollar auto industry. It has the potential to also disrupt the trillion dollar electric utility industry. The analysts point to Tesla’s planned gigafactory as an opportunity for commercializing battery packs and have now nearly doubled their volume assumptions. This brings their base case price target to $320 a share.
The Morgan Stanley team is projecting that Tesla Motors Inc (NASDAQ:TSLA)’s share of the global auto market will rise to 90 basis points to 2028.
Tesla builds a captive ecosystem
They say the success of both the Model S and the Model X will create a “100% captive ecosystem” which will enable Tesla Motors Inc (NASDAQ:TSLA) to start serving the electric power generation and distribution market. Here’s the possible business model they see for the automaker.
Currently the grid storage space is the missing piece of the puzzle in terms of renewable energy. The Morgan Stanley team estimates that Tesla Motors Inc (NASDAQ:TSLA)’s “global fleet” will be able to hold 443 gigawatts of electricity, which is more than Mexico’s daily electricity consumption.
The other big area of opportunity they see for Tesla Motors Inc (NASDAQ:TSLA) is autonomous cars, and they say no other automaker is better positioned to dominate in this industry. They note that Tesla’s vehicles are both 100% electric and also connected. As software becomes more and more important in cars, they see Tesla, which is the only automaker based in Silicon Valley, as having the upper hand in autonomous cars, which they believe will save consumers $5.6 trillion globally.
How might Tesla enter the grid storage industry?
The Morgan Stanley team also examined the grid storage energy industry according to the different types of technology, and they see numerous areas where Tesla Motors Inc (NASDAQ:TSLA) may be able to get a foothold. Of course the gigafactory presents plenty of opportunities in Lithium-Ion and flow batteries, but that only scratches the surface. Here’s the full list of the possibilities they have considered.