Auto investors risk losing out without owning Tesla shares, says Morgan Stanley

The Biden administration proposes allocating $174 billion to develop the country’s electric-vehicle ecosystem, which could enhance Tesla’s advantage o
...
The Elon Musk-led company, which is indisputably the current global market leader in EVs, reported surprisingly strong delivery numbers for the first quarter earlier this week. (AP)
The Elon Musk-led company, which is indisputably the current global market leader in EVs, reported surprisingly strong delivery numbers for the first quarter earlier this week.

Tesla Inc. can disproportionately benefit from the U.S. infrastructure package, and investors in the auto sector risk losing out if they don’t own the stock, Morgan Stanley said.

The Biden administration proposes allocating $174 billion to develop the country’s electric-vehicle ecosystem, which could enhance Tesla’s advantage over legacy car companies and even some new entrants, analyst Adam Jonas wrote in a note Wednesday. However, he warned that the development may happen in a volatile fashion, bringing in some near-term uncertainties that might differ from year to year.

Also check these Vehicles

Find more Cars
Tesla Model S (HT Auto photo)
UPCOMING
BatteryCapacity Icon75 kWh Range Icon396 km
₹70 Lakhs - 1 Cr
Alert Me When Launched
Tesla Model 3 (HT Auto photo)
UPCOMING
BatteryCapacity Icon82kWh Range Icon 555 km
₹ 70 - 90 Lakhs
Alert Me When Launched
Hyundai Kona Electric 2024 (HT Auto photo)
UPCOMING
BatteryCapacity Icon64.8 kWh Range Icon418 Km
₹ 25 Lakhs
Alert Me When Launched
Hyundai Kona Electric (HT Auto photo)
BatteryCapacity Icon39.2 kWh Range Icon452 km
₹ 23.79 - 23.98 Lakhs
Compare
View Offers
Odysse Electric Odysse Electric Hawk (HT Auto photo)
BatteryCapacity Icon2.96 kWh Range Icon170 Km
₹ 73,999 - 98,500
Compare
View Offers
Compare

“It will likely be complicated by a labyrinth of national and local laws that will present advantages and disadvantages to various automakers, depending on the year that you choose to analyze," Jonas said. Yet over the long term, “auto investors face greater risk not owning Tesla shares in their portfolio than owning Tesla shares in their portfolio."

The Elon Musk-led company, which is indisputably the current global market leader in EVs, reported surprisingly strong delivery numbers for the first quarter earlier this week, even as most carmakers are struggling with a chip shortage that has forced production halts. Despite that, Tesla shares have been stuck in a rut over the past month and are down about 5% this year. The stock rose 743% last year.

The bill, which includes purchase incentives, development of charging infrastructure and grid enhancements, would be good for Tesla, which has a higher volume of EV products in the pipeline than most manufacturers, according to Jonas.

Morgan Stanley has a buy-equivalent rating on Tesla and a price target of $880. The average analysts’ target on the stock is $651, with 17 buy recommendations, 13 holds and 12 sells.

Tesla shares closed down 3% at $670.97 Wednesday, their biggest drop since March 26.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.

First Published Date: 08 Apr 2021, 15:08 PM IST
NEXT ARTICLE BEGINS

Check Latest Offers

Please provide your details to get Personalized Offers

Choose city
+91 | Choose city
Choose city
Select a dealer

Want to get the best price for your existing car?

Powered by: Spinny Logo
By clicking "View Offers" you Agree to our Terms and Privacy Policy
Dear Name

Please verify your mobile number.

+91 | Choose city
Couldn't verify the OTP.
It's either expired or it's incorrect.