IRA Could Be Worth Over $30 Billion to Tesla (TSLA) - Morgan Stanley

September 16, 2022 6:32 AM EDT
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Morgan Stanley analyst Adam Jonas reflected on Tesla (NASDAQ: TSLA) shares following the firm’s 10th annual Laguna conference.

Jonas recommends investors gain/increase exposure to Tesla and FREYR Battery (NYSE: FREY) “with conviction.”

“Tesla is a cheap (yes, we said that) way to gain exposure to the industrialization of the global battery supply chain. In our opinion, TSLA didn't-necessarily need the potentially tens of billions of tax credits implied by the IRA and moreover, Tesla may be one of the only companies in the world that can open up new gigafactories and generate positive EBITDA right away,” Jonas said in a client note.

The passage of the Inflation Reduction Act (IRA) could be almost “too good” for Tesla, Jonas added. Morgan Stanley estimates that Tesla could make over 3.1 million EVs in the U.S. by 2030.

“Assuming $10k IRA 'boost' per unit could be worth >$30bn to the company, nearly a 50% potential upside to our $65bn FY30 Auto EBIT.”

Morgan Stanley has an Overweight rating and a $383 per share price target on Tesla stock.

By Senad Karaahmetovic

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