Arab Press

بالشعب و للشعب
Tuesday, Feb 24, 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
GCC Secretary-General Holds Talks with EU Ambassador in Riyadh
Gulf States’ AI Investment Drive Seen as Strategic Bet on Technology and U.S. Security Ties
African Union Commission Chair Meets Saudi Vice Foreign Minister to Deepen Strategic Cooperation
President El-Sisi Holds Strategic Talks with Saudi Crown Prince in Riyadh
Lucid Unveils Up to $12,000 Incentive for Air and Gravity Models in Saudi Arabia
Saudi Arabia Enters Global AI Partnership, Expanding Its Role in International Technology Governance
Saudi Arabia’s Landmark U.S. LNG Agreement Signals Major Strategic Shift
Saudi Arabia Accelerates Global Gaming Push with Billion-Dollar Deals and Expanded PIF Mandate
Saudi Arabia Reports $25.28 Billion Budget Deficit in Fourth Quarter of 2025
Alvarez & Marsal Tax Establishes Dedicated Pillar Two and Transfer Pricing Team in Saudi Arabia
United States Approves Over Fifteen Billion Dollars in Major Arms Sales to Israel and Saudi Arabia
Pre-Iftar Walks Gain Momentum as Ramadan Wellness Trend Spreads
Middle East Jackup Rig Fleet Contracts Further After Saudi Drilling Suspensions
Türkiye and Saudi Arabia Prepare to Sign Five Gigawatt Renewable Energy Deal at COP31
King Mohammed VI Congratulates Saudi Leadership on Founding Day, Reaffirming Strategic Ties
US Envoy Huckabee Clarifies Remarks on Israel After Expansionism Controversy
Saudi Arabia Introduces Limited Exceptions to Regional Headquarters Requirement for Foreign Firms
Saudi Arabia Joins Global Partnership on Artificial Intelligence, Elevating Its Role in Shaping AI Governance
Saudi Arabia and Arab States Mobilise Diplomatically After U.S. Envoy’s Israel Remarks
Cristiano Ronaldo Reaffirms His Commitment to Saudi Arabia Amid Transfer Speculation
Proposed US-Saudi Nuclear Deal Raises Questions Over Uranium Enrichment Provisions
Saudi Arabia Sends 81st Aid Flight to Gaza as Humanitarian Air Bridge Continues
Global Games Show Riyadh 2026 Positioned as Catalyst for Saudi Arabia’s Vision 2030
Saudi Arabia Eases Procurement Rules, Allowing Foreign Firms Greater Access to Government Contracts
Türkiye and Saudi Arabia Seal Two Billion Dollar Solar Energy Agreement
Saudi Crown Prince Reportedly Sends Letter to UAE Leader Over Yemen and Sudan Policies
Saudi Arabia Voices Concerns to UAE Over Sudan Conflict and Yemen Strategy
Saudi Arabia Joins Global Artificial Intelligence Alliance to Strengthen International Collaboration
Shura Island Positioned as Flagship of Saudi Arabia’s Ambitious Red Sea Tourism Drive
Saudi Arabia Rebukes Mike Huckabee Over Remarks in Tucker Carlson Interview
OpenAI CEO Sam Altman praises the rapid progress of Chinese tech companies.
Concerns Mount Over Potential Saudi Uranium Enrichment in Prospective US Nuclear Accord
Trump Directs Government to Release UFO and Alien Information
Trump Signs Global 10% Tariffs on Imports
Investability Emerges as the Defining Test of Saudi Arabia’s Next Market Phase
Saudi Arabia’s Packaging Market Accelerates as Sustainability and E-Commerce Drive Transformation
Saudi Arabia Unveils $32 Billion Push Into Theme Parks and Global Entertainment
Saudi Crude Exports to India Climb Sharply, Closing Gap With Russia
Saudi Arabia’s Halal Cosmetics Market Expands as Faith and Ethical Beauty Drive Growth
ImmunityBio Secures Saudi Partnerships to Launch Flagship Cancer Therapy
United Kingdom Denies U.S. Access to Military Base for Potential Iran Strike
Türkiye and Saudi Arabia Launch Expanded Renewable Energy Partnership
US Supreme Court Voids Trump’s Emergency Tariff Plan, Reshaping Trade Power and Fiscal Risk
Mongolian Mining Family’s HK$247 Million Stanley Home Purchase Highlights Resilient Luxury Market
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Saudi Arabia Tops Middle East Green Building Rankings with Record Growth in 2025
Qatar and Saudi Arabia Each Commit One Billion Dollars to President Trump’s ‘Board of Peace’ Initiative
Ramadan 2026 Prayer Times Set as Fasting Begins in Saudi Arabia and Egypt Announces Dates
Saudi Arabia Launches Ramadan 2026 Hotel Campaign to Boost Religious and Leisure Tourism
Saudi Arabia Seeks Reroute of Greece-Bound Fibre-Optic Cable Through Syria Instead of Israel
×