Tesla’s stock (TSLA) gets boost from ‘beyond an automaker’ scenario
Tesla’s stock (TSLA) has received a nice boost today from one of its biggest cheerleaders on Wall Street, and it’s based on the company achieving a “beyond an automaker” scenario.
For years, Tesla investors have pushed the argument that Tesla is more than an auto company.
That’s technically true. The company is also big in the energy space and it is making advancements in AI and other spaces.
However, the financials are almost completely driven by its auto business so far.
Therefore, the idea hasn’t been super popular on Wall Street.
Adam Jonas, who covers Tesla for Morgan Stanley, has been among the major Wall Street analysts most open to start accounting for other Tesla businesses in the valuation.
In a new note to clients today, the analysts brought the idea back into focus:
Many investors still debate the merits of Tesla as ‘more than an auto company.’ In our opinion, Tesla is definitely an auto company. It is also an AI company. Think ‘and’ not ‘or.’
To illustrate his point, Jonas explained that only 33% of his $380 price target for Tesla is linked to the automotive business:
In our opinion, Tesla is far more than an auto company. Of our $380 price target, our valuation of the ‘core’ auto business is $86/share, leaving 77% of our target derived by Network Services, Mobility, 3rd-party battery/FSD licensing, Energy and Insurance. We receive significant pushback from our clients for including non-auto revenue streams in our valuation. Our OW thesis is highly dependent upon these business lines becoming far greater drivers of earnings with clear milestones/proof-points backed by accompanying financial disclosures.
Morgan Stanley also notes that the $380 price target is only that average case and the firm also has a $550 bull case and $120 bear case.
Electrek’s Take
I understand Morgan Stanley getting pushback on that considering just how Tesla’s current share price is overwhelmingly driven by its auto business.
But I think its energy business is going to be massive.
Not because of solar deployment or even energy storage deployment, which is going to be huge too, but because of its energy software like virtual power plants and Tesla Electric.
I think those are going to become huge businesses as Tesla onboards more people through deployments of Powerwalls, gateways, and solar inverters, which can control the loads.
However, I think the rest, like AI, insurance, etc. is up for debate.
What do you think? Let us know in the comment section below.
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In a joint statement, French and German economists have called on governments to adopt “a common approach” to decarbonize European trucking fleets – and they’re calling for a focus on fully electric trucks, not hydrogen.
France and Germany are the two largest economies in the EU, and they share similar challenges when it comes to freight decarbonization. The two countries also share a border, and the traffic between the two nations generates major cross-border flows that create common externalities between the two countries.
At the same time, the EU’s transport sector has struggled to reduce emissions at the same rate as other industries – and road freight in particular is a major contributor to harmful carbon emissions issue due to that industry’s heavy reliance on diesel-powered trucks.
And for once, it seems like rail isn’t a viable option:
While rail remains competitive mainly for heavy, homogeneous goods over long distances. Most freight in Europe is indeed transported over distances of less than 200 km and involves consignment weights of up to 30 tonnes (GCEE, 2024) In most such cases, transportation by rail instead of truck is not possible or not competitive. Moreover, taking into account the goods currently transported in intermodal transport units over distances of more than 300 km, the modal shift potential from road to rail would be only 6% in Germany and less than 2% in France.
That leaves trucks – and, while numerous government incentives currently exist to promote the parallel development of both hydrogen and battery electric vehicle infrastructures, the study is clear in picking a winner.
“Policies should focus on battery-electric trucks (BET) as these represent the most mature and market-ready technology for road freight transport,” reads the the FGCEE statement. “Hence, to ramp-up usage of BET public funding should be used to accelerate the roll-out of fast-charging networks along major corridors and in private depots.”
The appeal was signed by the co-chair of the advisory body on the German side is the chairwoman of the German Council of Economic Experts, Monika Schnitzer. Camille Landais co-chairs the French side. On the German side, the appeal was signed by four of the five experts; Nuremberg-based energy economist Veronika Grimm (who also sits on the National Hydrogen Council, which is committed to promoting H2 trucks and filling stations) did not sign.
You can read an English version of the CAE FGCEE joint statement here.
Electrek’s Take
MAN Trucks’ CEO famously said that it was “impossible” for hydrogen to compete with BEVs, and even committed to building 200 hydrogen-powered semi truck to prove out that hypothesis.
He’s not alone. MAN’s board member for research and development, Frederik Zohm, said that the company is the one saying hydrogen still has years to go. “(MAN) continues to research fuel cell technology based on battery electrics,” he said, in a statement quoted by Hydrogen Insight, before another board member added that, “we (MAN) expect that, in the future, we will be able to best serve the vast majority of our customers’ transport applications with battery-electric trucks.”
With companies like Volvo and Renault and now Mercedes racking up millions of miles on their respective battery electric semi truck fleets, it’s no longer even close. EV is the way.
SOURCE | IMAGES: CAE FGCEE; via Electrive.
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GE Vernova has produced over half the turbines needed for SunZia Wind, which will be the largest wind farm in the Western Hemisphere when it comes online in 2026.
GE Vernova has manufactured enough turbines at its Pensacola, Florida, factory to supply over 1.2 gigawatts (GW) of the turbines needed for the $5 billion, 2.4 GW SunZia Wind, a project milestone. The wind farm will be sited in Lincoln, Torrance, and San Miguel counties in New Mexico.
At a ribbon-cutting event for Pensacola’s new customer experience center, GE Vernova CEO Scott Strazik noted that since 2023, the company has invested around $70 million in the Pensacola factory.
The Pensacola investments are part of the announcement GE Vernova made in January that it will invest nearly $600 million in its US factories and facilities over the next two years to help meet the surging electricity demands globally. GE Vernova says it’s expecting its investments to create more than 1,500 new US jobs.
Vic Abate, CEO of GE Vernova Wind, said, “Our dedicated employees in Pensacola are working to address increasing energy demands for the US. The workhorse turbines manufactured at this world-class factory are engineered for reliability and scalability, ensuring our customers can meet growing energy demand.”
SunZia Wind and Transmission will create US history’s largest clean energy infrastructure project.
Read more: The largest clean energy project in US history closes $11B, starts full construction
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