Overview
Morgan Stanley has reaffirmed an Equalweight rating on Tesla, keeping its price target at $415.00, which is nearly equivalent to the company's current share price of $417.32. The reiteration follows a tentative announcement from Tesla indicating plans to add 100 GW of solar manufacturing capacity. Morgan Stanley's analysis highlights how the initiative fits with CEO Elon Musk's stated ambitions around solar-powered infrastructure and complements Tesla's existing energy storage operations.
Balance sheet and liquidity context
The investment bank noted Tesla's strong balance sheet positioning, pointing out that the company holds more cash than debt. Tesla's liquidity profile is further evidenced by a reported current ratio of 2.16, signaling that short-term liabilities are covered by liquid assets. Morgan Stanley frames the capital allocation to vertical solar manufacturing against this backdrop of relative financial strength.
Potential valuation impact
Morgan Stanley provided preliminary estimates for the upside to Tesla's Energy business if the solar manufacturing plan reaches full capacity. The firm projects an incremental equity value in the range of $20 billion to $50 billion, which it translates to roughly $6 to $14 per share. That potential addition would be layered on top of Morgan Stanley's current valuation of Tesla's Energy division at $140 billion, or about $40 per share.
The firm qualified the prospective benefit by noting this increment would be a modest fraction of Tesla's reported annual revenue of $94.83 billion, and that the stock currently trades at a P/E ratio of 388.95. While Morgan Stanley does not view the solar manufacturing plan as dramatically altering Tesla's standalone valuation, it suggests the vertical integration could create strategic advantages and growth opportunities for the combined solar and energy storage businesses.
Strategic rationale and risks
Morgan Stanley argues that pursuing vertically integrated solar manufacturing aligns with Musk's stated goal to enable solar-powered data centers in space and could reduce the risk of energy-related supply bottlenecks that might impede broader objectives across Tesla's other business segments. Still, the firm characterizes the overall materiality of the investment as limited to Tesla's total valuation on its own.
Other recent developments in Tesla and related ecosystem moves
Tesla has also established an artificial intelligence training center in China to focus on local applications and assisted driving capabilities, a development confirmed by Tesla Vice President Tao Lin. Separately, Wolfe Research remains cautious about Tesla's stock fundamentals even as it anticipates a "catalyst-rich year" with several product launches and updates planned for 2026.
In personnel and market activity related to the energy sector, Tesla's former energy chief has raised more than $230 million for battery startup Lunar Energy to expand into the U.S. home energy storage market.
Beyond Tesla, Citizens upgraded Uber from Market Perform to Market Outperform and set a new price target at $100, citing an improved valuation despite lingering competitive concerns, including competition from Tesla. Meanwhile, SpaceX is preparing for an initial public offering and has held meetings with non-U.S. banks - including European firms - as it looks to broaden its banking relationships outside the United States.
Conclusion
Morgan Stanley's unchanged Equalweight rating and $415 target reflect a view that Tesla's tentative 100 GW solar manufacturing plan is strategically coherent with corporate objectives and could add measurable equity value to the Energy segment, but is unlikely to be transformational for Tesla's overall valuation on a standalone basis. The firm's assessment is set against Tesla's sizable market capitalization of $1.57 trillion, its positive cash position relative to debt, and indicators of significant operational activity across energy, AI, and broader mobility segments.