By Michael Elkins
Morgan Stanley reiterated an Overweight rating and $220.00 price target on Tesla, Inc. (NASDAQ:TSLA) after The National Bureau for Statistics in Norway released their annual car park data. Morgan Stanley looks to Norway as the country is an estimated 19yrs ahead of the US with 79% EV sales penetration in 2022.
MS analysts wrote in a note, "The National Bureau for Statistics in Norway (Statistics Norway) released their annual car park data last Friday. The numbers speak for themselves: Norway's electric vehicle to total car park was 21% and EV sales penetration reached 79% during 2022. Although we note that it is difficult to use small countries like Norway as a 'roadmap' for what the future of EVs will look like in the US, we believe studying markets where EVs have been successful can offer insights investors can extrapolate."
On Morgan Stanley's current EV forecast, Norway is approximately 19 years ahead of the US on EV sales penetration and 13 years ahead on EV fleet penetration. Even if Norway's geography is arguably unfavorable for battery-powered vehicles, Norway is the leading EV market in the world in terms of penetration. Government incentives and historically cheap electricity significantly reducing the total cost of ownership of EVs are the main drivers of EVs rapid expansion in Norway, in the analysts' view.
Data from the Environmental and Energy Study Institute shows that US states with lower population density have been slower to adopt to EVs domestically. However, the most recent data from Norway shows that even consumers in rural areas have largely adopted EVs. The analysts believe that Norway's EV market provides evidence that the value proposition of EVs for consumers in US' rural areas can be compelling and that it is possible to reach significant EV penetration even outside urban and suburban centers.
The latest data also shows that EV adoption is not just contained to higher income households. Lower income consumers have been increasing their EV sales penetration at a similar pace to higher income consumers, following the 'early adopters' which largely were from higher income brackets.
Shares of TSLA are up 0.92% in pre-market trading on Thursday.