Tesla (TSLA): Recent Starlink FCC Filing May Imply a Fleet of Autonomous Vehicles is Nearer - Morgan Stanley
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Morgan Stanley analyst Adam Jonas reiterated an Overweight rating and $880.00 price target on Tesla (NASDAQ: TSLA) noting that SpaceX’s Starlink unit recently filed a request with the FCC to begin connecting its LEO satellite network to moving vehicles (cars, trucks, jets, ships, etc.). The overlap between cars and comms is obvious and the analyst thinks a high speed network may be necessary for a breadth of autonomous vehicles. He brought up many points to support this thesis but here are a few of the most poignant:
1) An internal Morgan Stanley analysis suggests that autonomous cars can produce as much as 40 TB of data/hour, which is equivalent to 1 to 3 thousand years of iPhone data usage, requiring wireless data to be on the order of 50 to 500 GB/month.
2) Starlink’s beta is focused on the home broadband market, but mobility markets like maritime and in-flight connectivity have no fixed-line competitors and can offer significantly higher yields for Starlink’s capacity.
3) Of the more than 250 million vehicles on the road in the US, it is unlikely that more than 20% to 25% have anything better than basic GPS/sat-nav with less than 1% of vehicles capable of OTA updates of firmware.
4) An article by Michael Sheetz at CNBC, citing company job postings, reports that SpaceX is planning to build a new Starlink equipment factory in Austin, TX, near Tesla’s Austin gigafactory. This is where the company will make the Cybertruck, Semi and, likely, other fleet oriented products.
The analyst stated "There are many players rolling out large and sophisticated internet of cars AI/ML fleets (i.e. Tesla has a fleet of roughly 1.3 million vehicles in service today, rising to 30mm to 40mm by 2030e) which could potentially serve as an important ‘captive customer’ for a LEO player. At the same time,
various LEO operators can provide a redundant, resilient cybersecure transportation ‘moat’ for the ever expanding global mobility network."
Shares of Tesla closed at $597.50 yesterday.
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