Arab Press

بالشعب و للشعب
Tuesday, Apr 07, 2026

Tesla is morphing into more than a car maker

Tesla is morphing into more than a car maker

Tesla Inc.’s transformation from an electric-car maker to a software/connected vehicle services provider is the “entry ticket” to a much larger business, according to Morgan Stanley.

Elon Musk's Tesla is way more than just an electric-car maker, according to Morgan Stanley.

That's why the firm says the stock can continue to climb, building on its 428% advance this year, as it transforms to a software/connected vehicle services provider -- the “entry ticket” to a much larger business.

“To only value Tesla on car sales alone ignores the multiple businesses embedded within the company, and ignores the long term value creation arising from Tesla’s core strengths, driven by best in class software and ancillary services,” wrote analyst Adam Jonas.



Tesla’s services business, which includes self-driving, GPS, entertainment options, performance upgrades and more, is expected to grow significantly over the next decade.

Current revenue from services just below $1 billion, or about 1% to 2% of all sales. Jonas believes that business will reach 6% of company sales by 2030, equating to as much as 20% of EBITDA (earnings before interest, taxes, depreciation and amortization, which is a measure of a company's overall financial performance).

Tesla’s advantage lies in its “scale and cost in EVs” which will allow the company to undercut its competition in pricing its products and expand its addressable market, according to Jonas.

New services, which will be distributed to users through software upgrades, have the potential to range from increased self-driving capabilities to upgrade content to insurance.

Jonas believes the boost in services revenue will lift shares by 22% from their current level to $540 per share. His previous target was $360.

Shares could reach $1,068 apiece in a bull case scenario. Jonas also raised his rating to overweight from equal weight.

To reach his price target, Jonas assigns the following sum-of-the-parts valuations to Tesla’s businesses.

Tesla Auto: $254 per share

Tesla Energy: $12 per share

Tesla Mobility/Ridesharing: $38 per share

Tesla Network Services: $164 per share

Tesla as a third-party supplier: $58 per share

Shares were higher on Wednesday after the S&P Dow Jones Indices announced on Monday that the shares will be added to the S&P 500 on Dec. 21 as part of the index’s rebalancing.



The company in the three months ended Sept. 30 posted its fifth consecutive quarterly profit, helping pave the way for its inclusion.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Taiwan to Source Oil Shipments from Saudi Arabia’s Red Sea Ports
Saudi Arabia Evacuates Riyadh Financial District as Precaution Amid Regional Tensions
Saudi Arabia Balances Ambitious Economic Vision Amid Regional Tensions and Financial Pressures
Budget Saudi Arabia Reports Strong Full-Year 2025 Financial Performance
Saudi Arabia Expands Investment in Capcom With Stake Reaching Six Percent
Saudi Arabia Assesses Significant Economic Impact From Regional Conflict Involving Iran
US Beef Secures Expanded Market Access in Saudi Arabia
Jordan and Saudi Arabia Declare Absolute Solidarity in Response to Iranian Threats
Saudi Arabia Raises Oil Prices to Record Premium Amid Strong Market Demand
California’s Salton Sea Emerges as Strategic Lithium Hub for Clean Energy Future
Iranian Drone Strike on US Embassy in Saudi Arabia Reportedly Targeted Intelligence Facility
Saudi Deputy Foreign Minister Meets French Embassy Official to Strengthen Bilateral Engagement
Saudi Arabia Calls on United States to Seize Strategic Opportunity to Reshape Middle East
Dating Apps Surge in Saudi Arabia as Social Norms Rapidly Evolve Among Youth
Saudi Arabia Detains Over Fourteen Thousand Illegal Residents in Week-Long Enforcement Drive
Saudi Foreign Minister Engages in Diplomatic Talks with Pakistan, Kuwait and Latvia on Regional Developments
Saudi Arabia Intercepts Cruise Missile as Regional Tensions Intensify
Saudi Stock Market Edges Higher as Tadawul Index Records Modest Gain
Underlying Rivalry Between Saudi Arabia and UAE Persists Despite Temporary Calm
Saudi Arabia’s Non-Oil Sector Contracts in March as Regional Tensions Weigh on Business Activity
Saudi Arabia Unveils Ambition to Establish Prestigious Global Prize Rivaling the Nobel
Saudi Crown Prince to Engage Wall Street in Push for Investment and Economic Expansion
Iran Accuses Saudi Arabia and UAE After Downing of Chinese-Made Drone
Saudi Arabia Condemns Attack on Hospital in Sudan, Calls for Protection of Civilians
Coordinated Drone Strike Targets CIA Facility Within US Embassy in Saudi Arabia
Italy’s Meloni Prioritises Energy Security and Strait of Hormuz Stability During Gulf Tour
Uncertainty Emerges Over Timeline and Direction of Saudi Arabia’s Ambitious Ski Resort Project
UAE and Saudi Arabia Escalate Strategy with Drone Operations Targeting Iran
Trump Delivers Characteristic Remarks on Saudi Crown Prince Amid Intensifying Iran Conflict
Drone Strike on US Embassy in Riyadh Caused Greater Damage Than First Reported
Saudi Arabia Introduces Flexible Solutions for Expired Visas Amid Regional Disruptions
Saudi Arabia’s Online Car Market Accelerates with AI Pricing and Fully Digital Buying Experience
Saudi Arabia Reassesses Defence Strategy as Iranian Drone Threat Drives Shift in Military Partnerships
Drone Strikes Target Saudi Arabia, Kuwait and Bahrain as Regional Conflict Intensifies
Japan and Saudi Arabia Align Efforts to Ease Rising Tensions with Iran
Saudi Crown Prince and Italy’s Meloni Strengthen Strategic Ties in High-Level Talks
SpaceX Explores Potential Five Billion Dollar Investment from Saudi Sovereign Wealth Fund Ahead of IPO
Saudi Arabia Lifts Key Import Barriers to Expand Access for U.S. Beef Exports
Saudi Arabia Enforces Strict Travel Penalties for Visits to Restricted Countries
Italy’s Meloni Embarks on Strategic Gulf Tour to Address Energy Security and Regional Stability
Saudi Film Festival Rescheduled to Summer as Regional Tensions Continue
Saudi Arabia Reports Forty Two Point Six Billion Dollars in Foreign Tourist Spending in 2025
Saudi Crown Prince and Russian President Hold Strategic Call on Escalating Regional Crisis
Saudi Arabia Advances Rail Network as Strategic Alternative to Strait of Hormuz Shipping Route
Ruanyun Edai Launches Saudi Arabia Hub With Forecast of Ten Percent Revenue Growth
Greek Defence Minister Visits Troops in Saudi Arabia Following Successful Missile Interception
Saudi Arabia Expands Global Strategy With Focus on African Critical Minerals
SpaceX Explores Potential Five Billion Dollar Investment From Saudi Fund Ahead of Possible IPO
US Central Command Dismisses Iranian Claim of Mass Casualties Among American Personnel in Saudi Arabia
Co-Diagnostics to Establish Molecular Diagnostics Facility in Saudi Arabia Through Joint Venture
×