Source: Wall Street See

With the dust settled on the US presidential election, as the relationship between Musk and Trump deepens, the outlook is being re-evaluated by investors. Morgan Stanley even proposed a bullish price target of $500 for Tesla. $Tesla (TSLA.US)$ is being re-evaluated by investors. Morgan Stanley even proposed a bullish price target of $500 for Tesla.

On November 11th, Morgan Stanley's latest research report shows that the market is full of expectations for Tesla's long-term potential in the fields of autonomous driving, wind power, and AI. In a bullish market scenario, the company's stock price could rise to $500 in the next 12 months.

Recently, Musk's alignment with Trump has helped propel Tesla's stock price to soar by about 40%, reaching a two-year high, exceeding Morgan Stanley's target price of $310. With Tesla's current stock price at $350, the company valuation multiple (EV/EBITDA) has reached 16 times. The bank's research report predicts that if the stock price reaches $400, the valuation multiple will rise to 19 times, and it will approach 24 times at $500.

With Musk's increasing political influence, Tesla may play a more important role in the future of new energy, autonomous driving, and robotics in the USA. The report points out that although it's difficult to quantify Musk's impact on Tesla in relation to the Trump government, Musk has risen from a political "outsider" to a potential key figure in policy-making, potentially accelerating Tesla's development to some extent.

Energy, autos, and travel businesses collectively driving towards the $500 target.

Morgan Stanley states that in the next 12 months, in a bullish market scenario, Tesla's stock price is expected to reach $500; in a base scenario, Tesla's stock price may be around $310; in a bearish market scenario, Tesla's stock price could drop to $100.

The research report mentioned the main driving factors and key assumptions of Tesla's $500 bull market target, including autos business contributing $90 per share, energy business contributing $85 per share, etc.

• Autos Business: By 2030, Tesla is expected to sell 8 million vehicles, with a compound annual growth rate of 28%, contributing $90 per share.

• Energy Business: By 2030, Tesla's Energy Storage System (ESS) is expected to deploy 400 GWh, with a compound annual growth rate of 54%, contributing $85 per share.

• Network Services: Including software, charging, Full Self-Driving (FSD), and other recurring income, contributing $146 per share.

• Mobile/Shared Travel Services: By 2030, it is expected to have a fleet of 1 million vehicles, contributing $118 per share.

• Third-Party Battery and Power Systems: By 2030, providing batteries and power systems for 3.4 million non-Tesla electric vehicles, contributing $61 per share.

• Robotic business: It is expected to contribute $0 per share by 2030. This business is expected to contribute approximately $100 per share by 2040.

A few quarters ago, investors had little interest in Tesla's energy business, but this situation changed in 2023. The deployment volume of Tesla's energy storage systems increased by 125% in a year and is expected to double again this year. Musk's claim that Tesla's energy business (solar + energy storage) will be more valuable than the automotive business is being validated. Morgan Stanley stated that the gross margin of Tesla's energy business is almost double that of the automotive business.

In the field of autonomous driving, Musk's autonomous driving technology and the 'Cybercab' plan are still facing regulatory challenges.

Research reports indicate that it is still unclear whether Tesla will obtain approval for unsupervised fully automated driving in the next two years, but advancements in its software technology could still drive stock prices up. Although Tesla's relationship with the Trump administration could be a potential bullish factor, the market still debates the monetization path and timing of Tesla's autonomous driving technology and siasun robot&automation business.

How does political influence change Tesla?

Research reports point out that while it's difficult to quantify Musk's impact on Tesla due to his relationship with the Trump administration, it's obvious that Musk's influence is rapidly increasing. If the USA moves towards independence in electric vehicles, autonomous driving, robots, and wind power in the future, Tesla may play a key role in this process. Some even compare this shift to the Manhattan Project, the Highway Act, or the Apollo Moon Landing Program.

Morgan Stanley stated that Musk has risen from a political "outsider" to a potential key figure in policy-making, which may to some extent accelerate Tesla's development beyond the automotive sector.

Editor / jayden