According to Morgan Stanley analysts, Tesla (NASDAQ:TSLA) may have become more crucial to Elon Musk’s ambitions than ever before. The electric vehicle giant is viewed as a cornerstone of U.S. competitiveness in artificial intelligence and robotics.
The bank noted, “Elon Musk runs 5 companies… He has control of the 4 private ones but owns just 13%… of the public one.” It added, “In our view, Tesla’s expertise in manufacturing, data collection, robotics/physical AI, energy, supply chain and infrastructure are more critical than ever before to put the U.S. on an even footing with China in embodied AI.”
Morgan Stanley’s recent report identifies 11 key developments influencing Tesla’s future. These include China’s gamified humanoid robot contests, called the “Humanoid Olympics,” as well as significant price cuts by BYD (USOTC:BYDDF), which slashed prices on some electric vehicle models by as much as 30%, intensifying the so-called “race to the bottom” that Tesla is facing.
The report emphasizes Tesla’s increasing focus on artificial intelligence, particularly through tighter integration with Musk’s xAI project.
Morgan Stanley wrote, “We see the intelligent robot as benefiting not just from the capture of photons and manipulation of atoms in the physical world but also the capture and ’context’ of data from the digital world and omniverse.”
The firm also highlighted Tesla’s unique role in linking Musk’s ventures together: “Grok in the car. SpaceX on your Cybertruck. Optimus prosthetics on Neuralink patients.”
Despite fierce global competition and internal strains—Musk himself recently admitted Tesla is “stretched pretty thin”—Morgan Stanley reiterated its Overweight rating with a $410 price target.
The analysts concluded, “The challenges facing Tesla’s current business are widely reported and well known, while the opportunities in the future business are potentially greatly underestimated.”