Morgan Stanley’s Shocker: Tesla’s (TSLA) Annual Revenue To Exceed the Combined Yearly Revenues of General Motors and Ford by 2027
Tesla (NASDAQ:TSLA), the world’s largest EV manufacturer and the most valuable automaker by market capitalization, is headed toward a zenith that might have been unimaginable just a few years ago, as per the latest research note by Tesla permabull, Morgan Stanley’s Adam Jonas.
According to Jonas, Tesla’s US market share is expected to compute at 3.5 percent by the end of 2022. However, Morgan Stanley now estimates that Tesla’s market share in the US will swell to 10 percent by 2026 and 18 percent by 2030. Since the auto market is generally characterized as a zero-sum, low-growth sector, Jonas believes that Tesla’s dramatic market share increase will come at the expense of legacy automakers such as General Motors (NYSE:GM) and Ford (NYSE:F). In fact, Morgan Stanley now sees GM’s market share declining from 14.6 percent in 2021 to 14 percent by 2025, falling further to 12 percent by 2030. Similarly, Ford’s US market share is expected to plummet from 12.5 percent in 2021 to around 10 percent in 2030.
As a result of this dramatic upswing in market share, Morgan Stanley’s Adam Jonas expects Tesla’s FY 2027 revenue to exceed the combined total top-line metric registered by GM and Ford in that year, marking a seminal shift that would cement Tesla’s ascendancy. In numbers, Jonas expects Tesla’s revenue to exceed $300 billion by 2026!
As a refresher, Tesla had delivered 308,000 units in Q4 2021 and 936,000 units in the entire FY 2021. For the most recently concluded quarter (Q4 2021), Tesla reported total revenue of $17.72 billion vs. $16.57 billion that was expected. It also reported an EPS of $2.52 per share. Bear in mind that the company expects to keep registering a growth of around 50 percent in its annual revenues for the next few years.
While the recent sentiment in Tesla shares has taken a hit due to supply chain constraints and the fact that the company is currently not working on a $25,000 mass-market EV, its financials remain very strong. Moreover, with Giga Berlin and Giga Austin (Texas) expected to come online later this year to complement Giga Shanghai and Fremont, Tesla remains poised for explosive growth.
You can read the entire investment note here courtesy of @SawyerMerritt: