Tesla’s Trucking Business Could Unlock A $17B Software Opportunity, Morgan Stanley Says

Morgan Stanley says Tesla could generate between $12,000 and $18,000 in monthly software revenue per truck by 2040.

• The brokerage estimates the software business could generate $17 billion in revenue and roughly $7.5 billion in incremental EBIT.
• The estimates do not include Semi truck sales and charging infrastructure, Morgan Stanley said.
• The thesis is based on Morgan Stanley’s forecast that the U.S. autonomous trucking market would be worth between $500 billion and $1.1 trillion by 2041.

Tesla (TSLA) was in the spotlight on Friday after Morgan Stanley flagged a $17 billion long-term opportunity from its autonomous trucking software.

At the time of writing, TSLA shares were down 0.2%, but are still heading for their best week in a month.

Morgan Stanley Sees $12,000 To $18,000/Month Software Revenue Per Truck

Morgan Stanley reiterated an ‘Equalweight’ rating and $400 price target on Tesla, according to Investing.com. This represents a 10% upside from current levels. The firm estimates autonomous trucking software could command a subscription fee of $0.85 to $1 per mile.

Assuming a Semi travels 18,000 miles a month, that could generate between $12,000 and $18,000 in monthly software revenue per truck, the brokerage added. That compares with about $100 per month for Tesla’s Full Self-Driving (FSD) subscription at current levels.

If Tesla has 82,000 Semis on the road by 2040, representing a 13.5% share of the addressable autonomous market, Morgan Stanley estimates the software business could generate $17 billion in revenue and roughly $7.5 billion in incremental earnings before interest and tax (EBIT). The estimates do not include Semi truck sales and charging infrastructure.

Morgan Stanley’s US Autonomous Trucking Market Outlook

Morgan Stanley’s thesis is based on its forecast that the U.S. autonomous trucking market would be worth between $500 billion and $1.1 trillion by 2041.

The firm also estimates autonomous fleets to deliver around 20% net cost savings compared with human-driven fleets, largely through lower labor, fuel, and insurance expenses.

Tesla previously set a production goal of 50,000 Semi trucks per year.

Tesla Expands Model Y Lineup In China

Separately, Tesla launched its refreshed Model Y Performance in China, starting at 369,000 yuan ($54,450), according to a CnEVPost report on Friday.

The all-wheel-drive model accelerates from 0 to 100 kilometers per hour in 3.5 seconds and offers a range of 659 kilometers. Tesla estimates deliveries will begin within two to six weeks.

Retail Sees TSLA Rangebound For ‘Couple’ More Weeks

Retail sentiment surrounding TSLA on Stocktwits remained in the ‘bearish’ zone over the past 24 hours.

One user said TSLA stock could trade in a tight range for a couple of weeks before moving higher towards a breakout.

View this Stocktwits post

TSLA shares have declined more than 19% so far this year, the worst-performing stock among the so-called Magnificent 7.

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