Tesla Master Plan 4 = Anything But Cars - Morgan Stanley

Published 18/06/2024, 15:32
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Morgan Stanley analysts warn that investors should prepare for a shift in Tesla's (NASDAQ:TSLA) focus beyond just electric vehicles (EVs).

Analysts believe the upcoming Master Plan 4 (MP4) will reveal a strategic pivot towards "Anything But Cars" (ABC).

"Elon Musk seems to have acknowledged that China may have 'won' the battle for affordable traditional EVs," states the Morgan Stanley note. This suggests a potential de-emphasis on Tesla's core auto business.

The report highlights Tesla's growing ambitions in Artificial Intelligence (AI), robotics, and hybrid computing.

Analysts expect MP4 to showcase a more prominent connection between Tesla and Elon Musk's other ventures like SpaceX and X, forming a broader technology ecosystem.

Morgan Stanley believes the car business will become a less significant factor in Tesla's valuation over the next year. They see a combination of a weakening EV market and Tesla's expansion into new areas like humanoid robotics driving this shift.

While acknowledging the importance of a stabilizing auto business for Tesla's AI valuation, Morgan Stanley remains Overweight on Tesla with a $310 price target. They see Tesla's value extending beyond just car manufacturing, assigning only 20% of their price target to the core auto segment.

The report acknowledges that negative developments in the global EV market could still negatively impact Tesla's stock price in the near term.

However, analysts urge investors to consider Tesla's broader technology play, including areas like the Tesla Network and potential future ventures like Optimus robots, which are not currently factored into their price target.

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