Connect with us

Investor's Corner

Morgan Stanley outlines Tesla’s 8 key drivers for further expansion

Published

on

Recently, Morgan Stanley (MS) released a note on Tesla’s future capacity expansion. The note discussed key drivers that would push Tesla’s growth further in terms of model/segment and factory footprint. Each driver is discussed below.

Produce in markets where they want to sell & diversify outside China

“Cars don’t ship like iPhones, and there are benefits in high localization,” wrote the Morgan Stanley analysts. The investment bank expects “to see significant diversification going forward.”

Gigafactory Shanghai has proven to be an excellent move for Tesla. Tesla China has significantly contributed to the company’s growth since the Shanghai factory started operations. Giga Berlin and Giga Texas are poised to have the same impact when they are operational.

Make each new factory its ‘best’ factory

The Morgan Stanley note stated that there may be room to improve Tesla’s factories, specifically design, cost, and automation.

Tesla always strives to improve and be more efficient. The company’s constant push to improve can be seen in the slight differences and improvements in each Gigafactory. For example, Tesla Giga Shanghai’s layout and design seem based on the GA4 tent the company built when the company was ramping Model 3 production.

Advertisement

Giga Berlin seems to follow the same design, but Tesla has invested in some impressive machines for production in Europe. For instance, Elon Musk has talked about Giga Berlin’s paint shop for quite some time, describing it as one of the most advanced paint shops in the world.

Then there is Giga Texas, which will be Tesla’s Cybertruck factory. The Cybertruck’s unique stainless steel exoskeleton would probably introduce some tough production challenges that would undoubtedly bring about solutions in ways only Tesla could solve.

Spread bets across national regimes

Morgan Stanley writes that “the industry has learned some recent valuable lessons on overdependence on concentrated/extended supply chains.”

In the last earnings call, Elon Musk shared that Tesla faced some supply chain challenges in the first quarter, which the team handled well. Some rumors suggest that Tesla may be interested in investing in its own factory for chips to avoid similar supply chain challenges in the future. Tesla also stepped forward to help a global shipping company with its vast amounts of shipping data, hinting that Tesla is learning more about supply chain processes.

Tesla’s drivers for technological growth

Morgan Stanley lists two drivers related to Tesla tech that could help the company’s expansion. One tech-related driver states Tesla should set technology standards in major regions by getting there first.

The second driver related to tech states that battery economics drive expansion. “We believe battery vertical integration co-located with final assembly ideally suited to volume of 500k to 1mm units per plant,” noted the Wall Street firm.

Advertisement

Drivers for Tesla’s global market expansion

In its note, Morgan Stanley wrote that Tesla should aggressively reduce prices to prevent/delay encroachment from big tech. The note specifically mentions the Apple Car, calling it the “stalking horse.” Granted, Apple might be able to develop software for vehicles that is much better than software found in the cars of Tesla competitors. However, mass-producing a vehicle would be a challenge for a tech company like Apple with no car production experience.

The Wall Street firm also lists that Tesla partnerships could be a natural outcrop of the company’s global/scaled strategy. “We see scope for Tesla to work with other OEMs (both legacy and startups) in areas such as batteries, full EV skateboards, OS, and other products and services.

Tesla and Elon Musk have always been open to working with other automakers to drive its main goal forward: to expedite the move towards a solar electric economy.

The Teslarati team would appreciate hearing from you. If you have any tips, email us at tips@teslarati.com or reach out to me at maria@teslarati.com.

Advertisement

Maria--aka "M"-- is an experienced writer and book editor. She's written about several topics including health, tech, and politics. As a book editor, she's worked with authors who write Sci-Fi, Romance, and Dark Fantasy. M loves hearing from TESLARATI readers. If you have any tips or article ideas, contact her at maria@teslarati.com or via X, @Writer_01001101.

Investor's Corner

Tesla welcomes Chipotle President Jack Hartung to its Board of Directors

Tesla announced the addition of its new director in a post on social media platform X.

Published

on

Credit: @ArthurFromX/X

Tesla has welcomed Chipotle president Jack Hartung to its Board of Directors. Hartung will officially start his tenure at the electric vehicle maker on June 1, 2025.

Tesla announced the addition of its new director in a post on social media platform X.

Jack Hartung’s Role

With Hartung’s addition, the Tesla Board will now have nine members. It’s been a while since the company added a new director. Prior to Hartung, the last addition to the Tesla Board was Airbnb co-founder Joe Gebbia back in 2022. As noted in a Reuters report, Hartung will serve on the Tesla Board’s audit committee. He will also retire from his position as president and chief strategy officer at Chipotle, and transition into a senior advisor’s role at the restaurant chain, next month.

Hartung has had a long career in the Mexican grill, joining Chipotle in 2002. He held several positions in the company, most recently serving as Chipotle’s President and Chief Strategy Officer. Tesla highlighted Hartung’s accomplishments in a post on its official account on X.

“Over the past 20+ years under Jack’s financial leadership, Chipotle has seen significant growth with over 3,700 restaurants today across the United States, Canada, the United Kingdom, France, Germany, Kuwait and the United Arab Emirates. Jack was named ‘CFO of the Year’ by Orange County Business Journal and Best CFO in the restaurant category by Institutional Investor,” Tesla wrote in its post on X.

Advertisement

Tesla Board and Musk

Tesla is a controversial company with a controversial CEO, so it is no surprise that the Board of Directors tend to get flak as well. Two weeks ago, for example, Tesla Board Chair Robyn Denholm slammed The Wall Street Journal for publishing an article alleging that company directors had considered a search for a potential successor to Elon Musk. Denholm herself has also been criticized for offloading her TSLA shares.

More recently, news emerged suggesting that the Tesla Board of Directors had formed a special committee aimed at exploring a new pay package for CEO Elon Musk. The committee is reportedly comprised of Tesla board Chair Robyn Denholm and independent director Kathleen Wilson-Thompson, and they would be exploring alternative compensation methods for Musk’s contributions to the company.

Continue Reading

Investor's Corner

Rivian stock rises as analysts boost price targets post Q1 earnings

Rivian impressed with smaller-than-expected losses & strong revenue, pushing analysts to raise price targets.

Published

on

(Credit: Rivian)

Rivian stock is gaining traction as Wall Street analysts raise price targets following the electric vehicle (EV) maker’s first-quarter earnings report. Despite a dip after the announcement, optimism surrounds Rivian’s cost control and upcoming lower-priced cars.

Last week, Rivian reported a better-than-expected Q1 gross profit, surpassing Wall Street’s forecasts with adjusted losses of $0.48 per share against expectations of $0.92 per share. The company also reported a revenue of $1.24 billion compared to the $1.01 billion anticipated.

However, the EV automaker cut its 2025 delivery forecast and capital spending due to President Donald Trump’s tariffs. It explained that it is “not immune to the impacts of the global trade and economic environment.” RIVN stock dropped nearly 6% post-earnings, closing at $12.72 per share.

Wall Street remains upbeat about Rivian, citing progress toward launching lower-priced vehicles in 2026 and effective cost management. On Monday, Stifel analyst Stephen Gengaro raised his RIVN price target to $18 from $16, maintaining a “Buy” rating. He highlighted Rivian’s “solid progress” toward key milestones.

Advertisement

Conversely, Bernstein’s Daniel Roeska gave RIVN a “Sell” rating. However, Roeska also lifted his Rivian price target to $7.05 from $6.10, acknowledging “better” Q1 results. He warned that profitability remains distant and hinges on multiple product launches by the decade’s end.

Overall, Wall Street’s average price target for RIVN climbed from $14.18 to $14.31, a modest 13-cent increase reflecting positive sentiment. About one-third of analysts covering Rivian rate it a Buy, compared to the S&P 500’s average Buy-rating ratio of 55%.

On Monday, Rivian stock rose 2.7% to $14.64, slightly trailing the S&P 500 and Dow Jones Industrial Average, which gained 3.3% and 2.8%, respectively. The uptick may also stem from broader market gains tied to news of a temporary U.S.-China tariff suspension.

As Rivian navigates trade challenges and scales production at its Illinois factory, its Q1 performance and analyst support signal resilience. With lower-priced EVs on the horizon, Rivian’s strategic moves could bolster its position in the competitive EV market, offering investors cautious optimism for long-term growth.

Continue Reading

Investor's Corner

Tesla (TSLA) poised to hit $1 trillion valuation again amid reports of Trump China deal

TSLA stock was up about 8% at $322.56 per share on Monday’s premarket.

Published

on

tesla-model-y-giga-texas-logo
(Credit: Tesla)

Tesla shares (NASDAQ:TSLA) are on a tear on Monday’s premarket amidst reports that the United States and China have agreed to significantly roll back tariffs on each other’s goods for an initial 90-day period.

As of writing, the premarket price of TSLA shares suggests that the electric vehicle maker might end Monday with a $1 trillion valuation once more.

Tesla and China

TSLA stock was up about 8% at $322.56 per share on Monday’s premarket. As noted in a report from Barron’s, these prices suggest that the company could achieve a trillion-dollar valuation again, a level not seen since late February. Similar to Tesla, the S&P 500 and the Dow Jones Industrial Average were also up 2.8% and 2.1%, respectively, on Monday’s premarket.

The United States and China’s decision to roll back its tariffs would likely be appreciated by CEO Elon Musk. Despite working for the Trump administration’s Department of Government Efficiency (DOGE), and despite Tesla being least affected by the Trump administration’s tariffs due to its strong domestic supply chains in the United States, China, and Europe, Musk has noted that he is a supporter of non-predatory tariffs.

The United States and China’s Agreement

In a joint statement from the United States and China posted on the White House’s official website, the two countries agreed to lower reciprocal tariffs on each other by 115% for 90 days. This means that the United States will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, as noted in an ABC 12 report. China, on the other hand, will also lower its tariffs on American goods from 125% to 10%.

Advertisement

The talks were led by Chinese Vice Premier He Lifeng and Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, as per the joint statement. Bessent shared his thoughts about the matter in a comment in Geneva. “The consensus from both delegations is neither side wants to be decoupled, and what have occurred with these very high tariffs … was an equivalent of an embargo, and neither side wants that. We do want trade. We want more balance in trade. And I think both sides are committed to achieving that,” he said. 

A spokesperson from China’s Commerce Ministry also shared a statement about the matter. As per the spokesperson, the deal was an “important step by both sides to resolve differences through equal-footing dialogue and consultation, laying the groundwork and creating conditions for further bridging gaps and deepening cooperation.”

Continue Reading

Trending