4 days ago
Tesla could become a major player in drone manufacturing: Morgan Stanley
-- Tesla may be well-positioned to enter the drone and electric vertical takeoff and landing (eVTOL) market, according to Morgan Stanley, which sees a potential $9 trillion total addressable market (TAM) in the 'low altitude economy' by 2050.
In a note issued following a Ukrainian drone offensive on Russian air bases, Morgan Stanley called the incident a wake-up call for the strategic role of unmanned systems in the AI era.
'All future wars will be fought with drones,' the analysts wrote, adding that 'China makes more drones in a day than the United States makes in a year.'
Tesla (NASDAQ:TSLA) has not disclosed any specific plans related to aviation, but Morgan Stanley said the company has 'a host of relevant skills to be a factor in the Low Altitude Economy from both a commercial and (potentially) non-commercial perspective,' citing Tesla's expertise in battery storage, navigation, autonomy, robotics and manufacturing.
Responding to a question on Tesla's first-quarter earnings call, CEO Elon Musk warned: 'Any country that cannot manufacture its own drones is doomed to be the vassal state of any country that can. And we can't – America cannot currently manufacture its own drones.'
Morgan Stanley said that if Tesla captures even a fraction of the future eVTOL market, the impact on its valuation could be significant.
'We're coming up with potential preliminary outcomes in the order of $100 per Tesla share on the low-end to approximately $1,000 per Tesla share (or more) on the high end,' wrote the bank.
The firm added, 'We don't think investors are prepared for the scope of this revolution,' noting that a single eVTOL could generate the revenue equivalent of 15 ride-share vehicles.
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