Morgan Stanley says solar manufacturing could add as much as $50 billion in value to Tesla
Tesla’s recently reported move into solar manufacturing could add $25 billion to $50 billion in value to the company’s energy business, Morgan Stanley writes.
The bank currently values the energy business at $140 billion, so an increase of as much as $50 billion isn’t anything to sneeze at, though it’s also a drop in the bucket of Tesla’s gargantuan $1.3 trillion market cap, or the $1 trillion opportunity Wedbush Securities analyst Dan Ives thinks is packed into Tesla’s AI and autonomy efforts.
Reporting on Tesla’s solar ambitions knocked First Solar shares lower last week. But Morgan Stanley writes that Tesla is unlikely to compete directly with the country’s leading photovoltaic panel maker, instead pairing it with its fast-growing energy business and using much of that production internally. Rather than adding solar panels to an already glutted global market, Tesla could use them internally to avoid supply chain bottlenecks and meet its own growing power demands.
The bank expects Tesla to vertically integrate its solar capacity to meet data center demand, including for data centers in space. (As we’ve noted, the mission of Elon Musk’s SpaceX has been seeming very similar to Tesla’s these days.)
“We believe the decision to allocate capital to adding solar capacity may be justified by the value creation and growth opportunities that having a vertically integrated solar + energy storage business can yield,” the Morgan Stanley note reads.
Notably, Morgan Stanley estimates the solar panel endeavor will cost Tesla $30 billion to $70 billion — a sum that Tesla didn’t include as part of its doubled $20 billion-plus capex plan this year.