He’s back.
That’s the message Morgan Stanley’s Adam Jonas portrayed in a Monday morning note to investors as Tesla’s Full Self-Driving suite gained tentative approval in China after the CEO met with high-ranking officials.
As investors continued to question what Elon Musk’s commitment to Tesla was, the message is clear that he is pushing the electric automaker forward once again with this massive development to the FSD suite.
“Whether Tesla’s CEO is sleeping on a floor or on a plane…the message is clear: he’s back,” Jonas writes in a note to investors.
Jonas notes that there were undoubtedly investor concerns about whether Musk was “all in” on Tesla after his purchase of X, the social media platform that was known as Twitter prior to his acquisition.
“Even the smallest gesture of commitment has elevated meaning here, combating concerns over Musk’s commitment to Tesla relative to the broader Musk ecosystem of companies,” Jonas writes.
Interestingly, Tesla’s Q1 Earnings Call even included some speculation from institutional investors regarding Musk’s commitment to Tesla.
Toni Sacconaghi asked Musk, “Maybe you can just talk about where your heart is at, in terms of your interests, and do you expect to lessen your involvement with Tesla at any point over the next three years?”
Musk responded, “Well, Tesla constitutes the majority of my work time, and I work pretty much every day of the week. It’s rare for me to take a Sunday afternoon off. I’m gonna make sure Tesla is very prosperous, and it is. I think it is prosperous, and it will be very much so in the future.”
Musk’s evident commitment to Tesla is not the only thing to hone in on here, either. In China, Tesla has fought an uphill battle, and Morgan Stanley sees this is step as a huge victory for the company for a number of reasons.
We reported earlier on Wedbush stating that the addition of Chinese vehicles will increase data consumption for Tesla. However, Jonas makes another interesting point:
“We would assume that Elon Musk’s U.S. national security clearance is higher than that of the typical American CEO due to his control of SpaceX and the range of missions it conducts with NASA, Space Force, and the broader DoD. Achieving a potential detente with the PRC on such areas as autonomous driving/FSD is surprising and deserves greater research and understanding. For now, Musk winning blessing from the PRC for FSD rollout in the country seems to address embedded fears of Tesla’s China profit.”
One thing is for sure, Tesla has not felt a major development of this scale in some time. Although the Cybertruck launch was significant, it did not have a major impact on the stock, and that’s what investors are looking for.
Tesla shares are up over 17 percent at 12:20 p.m. on the East Coast.
Disclosure: Joey Klender is a TSLA Shareholder.
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