Tesla could become a major player in drone manufacturing: Morgan Stanley

Investing.com -- Tesla may be well-positioned to enter the drone and electric vertical takeoff and landing (eVTOL) market, according to Morgan Stanley, which sees a potential $9 trillion total addressable market (TAM) in the “low altitude economy” by 2050.

In a note issued following a Ukrainian drone offensive on Russian air bases, Morgan Stanley called the incident a wake-up call for the strategic role of unmanned systems in the AI era.

“All future wars will be fought with drones,” the analysts wrote, adding that “China makes more drones in a day than the United States makes in a year.”

Tesla (NASDAQ: TSLA) has not disclosed any specific plans related to aviation, but Morgan Stanley said the company has “a host of relevant skills to be a factor in the Low Altitude Economy from both a commercial and (potentially) non-commercial perspective,” citing Tesla’s expertise in battery storage, navigation, autonomy, robotics and manufacturing.

Responding to a question on Tesla’s first-quarter earnings call, CEO Elon Musk warned: “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 said that if Tesla captures even a fraction of the future eVTOL market, the impact on its valuation could be significant.

“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,” wrote the bank.

The firm added, “We don’t think investors are prepared for the scope of this revolution,” noting that a single eVTOL could generate the revenue equivalent of 15 ride-share vehicles.

You May Also Be Interested In

• Morgan Stanley Comments on Tesla (TSLA) Miam Robotaxi Launch
• JPMorgan on Tesla (TSLA): 'Strong 2Q Deliveries Beat Coincides with FSD Progress That Should Drive Positive Feedback Loops'
• Barclays Starts Healthpeak Properties Inc (DOC) at Equalweight