Morgan Stanley Analyst Foresees Tesla Grabbing A Larger Slice Of A Smaller EV Market

Morgan Stanley analyst Adam Jonas on Monday said they now expect Tesla Inc TSLA to deliver 1.90 million vehicles in FY23 and 7.9 million units in FY30, given the second quarter delivery numbers which beat consensus by a bit more than 4%.

The Tesla Analyst: Jonas rated Tesla ‘equal-weight' with a price target of $250.

The Tesla Thesis: The slow introduction of EVs by traditional automakers may be enabling Tesla to maintain a ‘higher for longer’ market share as opposed to expectations, Jonas said. The analyst believes that EV adoption will progress at a ‘lower pace’ till 2030 as opposed to market expectations, with Tesla achieving a higher proportion of the market than expected.

Drawing a parallel, Jonas said, “A smaller pie with a larger slice going to Tesla.”

Jonas noted that the results should ease fears of slowing demand and is evidence that price cuts worked.

Last month, Jonas said that Tesla must drive its vehicle cost further lower given the competition from Chinese EV makers. The analyst is eyeing further price cuts by Tesla and a sub-$25,000 Model 2 to fill the gap for affordable vehicles vacated by the Detroit 3.

Tesla Price Action: On Monday, Tesla shares closed 6.9% higher at $279.82 in the regular session.

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