Morgan Stanley sees potential for Tesla (NASDAQ:TSLA) to emerge as a major force in the drone and electric vertical takeoff and landing (eVTOL) sectors—an area the bank believes could balloon into a $9 trillion total addressable market by 2050.
In a research note sparked by a recent drone strike on Russian airfields during the Ukraine conflict, Morgan Stanley emphasized the growing strategic relevance of unmanned systems in modern warfare. “All future wars will be fought with drones,” analysts wrote, warning of the widening gap in manufacturing capacity: “China makes more drones in a day than the United States makes in a year.”
While Tesla has yet to announce formal plans to enter aviation, Morgan Stanley highlighted the company’s core competencies—such as battery innovation, autonomy, robotics, and precision manufacturing—as highly transferable to the so-called “Low Altitude Economy.”
“Tesla has a host of relevant skills to be a factor in the Low Altitude Economy from both a commercial and (potentially) non-commercial perspective,” the firm stated, referencing the growing importance of drone technology in both civilian and defense applications.
Tesla CEO Elon Musk also echoed concerns about America’s lag in drone production during the company’s first-quarter earnings call, stating: “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 believes that if Tesla secures even a small portion of the burgeoning eVTOL market, it could have a substantial impact on its stock price. “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,” the analysts wrote.
The report concluded with a bold projection: “We don’t think investors are prepared for the scope of this revolution,” the firm said, noting that the potential revenue from a single eVTOL vehicle could rival that of 15 traditional ride-sharing cars.