Shares of Tesla Motors are zooming higher after a Morgan Stanley analyst set a price target for the company that — if Tesla ever gets there — would make Tesla the most valuable automaker in the United States, topping stalwarts General Motors and Ford.
The analyst believes Tesla shares could reach $465 a share, about 66 percent higher than Morgan Stanley s prior target of $280 — or 91 percent above Friday s close of $243. At the new target, Tesla s market value would exceed GM and Ford. Tesla shares jumped more about 4 percent in morning trades.
The optimism is being fueled by an prediction by Morgan Stanley analyst Adam Jonas that Tesla is adding a new business model: self-driving cars, an Uber-style operation based on autonomous vehicles.
Given the pace of technological development both within Tesla and at rival technology and mobility companies, we would be surprised if Tesla did not share formalized business plans on shared mobility within the next 12 to 18 months, the Morgan Stanley analyst wrote in a research note on Monday.
The analyst called it Tesla Mobility urban transport, version 1.0, a position on demand service. Jonas said the service could be launched by 2018.
We view this business opportunity as potentially additive to Tesla s existing model of selling human-driven cars to private owners and see potential for this model to conceivably more than triple the company s revenues by 2029, Morgan Stanley s Jonas wrote in the note. That is, selling miles in addition to selling cars.
All of Tesla s vehicles are electric, connected, and able to learn through over-the-air firmware updates at any moment, the analyst stated.
As we have written for some time, we expect all car companies would eventually see nearly 100% of their revenues shift from the sale of human-driven, individually-owned cars to robot-driven, shared cars, the analyst wrote.
During a recent conference call with analysts, the Morgan Stanley analyst asked Tesla Chief Executive Officer Elon Musk whether Tesla would supply electric self-driving vehicles to ride-sharing companies such as Uber, or if Tesla would simply sell on-demand transportation services directly.
That s an insightful question. I don t think I should answer it, Musk replied.
Computer engineers work at the Tesla auto plant in Fremont. Photo credit: BANG staff
