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Morgan Stanley: Tesla Stock Could Hit $500

Irina Slav

Tesla’s share price could soar to $500 if the company sells a lot of Cybertrucks and its Chinese gigafactory performs better than expected, a Morgan Stanley analyst has said in a note.

According to Adam Jonas’s  “bull case” for the EV maker, Tesla could be selling as many as 100,000 Cybertrucks annually by the end of 2024, with the average price tag at $50,000, CNBC reports. After the launch of the truck, Elon Musk tweeted orders for it had reached and surpassed 200,000 in a matter of days.

The Chinese gigafactory, for its part, could be producing 450,000 cars by 2024/2025. Currently, plans for the gigafactory are to churn out 3,000 vehicles per week beginning in the first quarter of 2020, Electrek reported earlier this week, adding that some 200 Model 3 cars were spotted at the facility.

Jonas, however, made a point of clarifying that the bull case only concerned the short to medium term.

“To be clear, we are not bullish on Tesla longer term, especially as, over time, we believe Tesla could be perceived by the market more and more like a traditional auto OEM [original equipment manufacturer]; we are prepared for a potential surge in sentiment through 1H20 but question the sustainability,” the Morgan Stanley analyst wrote.

“We are cautious on Tesla’s prospects in China, given geopolitical/CFIUS concerns, we believe that the Model Y will likely cannibalize a significant amount of demand for the Model 3, and see Berlin Giga as a first step for Tesla to ultimately be seen by investors as an auto company rather than a high growth tech firm, with valuation reflecting that at some point.”

Tesla announced plans to build a gigafactory in Germany last month, after Musk had been talking about the idea for several years.

Europe is a strong market for EVs: one Tesla model recently became the most sold car there. Tesla sold 17,490 Model 3 cars in the European Union in September, making it the most sold plug-in EV on the continent, according to data compiled by Clean Technica.

By Irina Slav For Oilprice.com

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