According to Morgan Stanley analysts, electric carmaker Tesla Inc. (TSLA, Financial) is in the middle of "the most significant perturbation of priorities and strategy" in its history. While the Wall Street firm described it as a "confusing metamorphosis," it outlined five key points that could help clarify Tesla's new direction.
- End of the EV "Golden Age"
Morgan Stanley observed that the traditional EV industry is nearing the end of its "golden age" and shifting toward a more commoditized "dark age." The firm pointed to China's increasing dominance in EV production, which adds competitive pressures and reshapes the landscape of the EV market.
- Transition to AI and Robotics
While the EV industry faces commoditization, technologies like artificial intelligence and robotics remain in their prime. Tesla's shift in focus aligns with these high-growth sectors, positioning the company to capitalize on advanced technologies that will likely define the future of transportation and beyond.
- Operational Adjustments Reflecting New Priorities
Tesla's recent operational changes highlight this strategic shift. The company has delayed the release of the Model 2, cut its workforce by 10%, downsized its supercharger team, and scaled back its gigacasting operations. Morgan Stanley analysts interpret these steps as indicative of Tesla's increasing focus on AI infrastructure.
- Participation in the AI "Arms Race"
Morgan Stanley's analysis emphasizes Tesla's active role in the “AI arms race,” indicating that the company is prioritizing supercomputing and robotics advancements. This commitment extends beyond automotive applications, as Tesla seeks to build a comprehensive AI ecosystem to establish a strong foothold in the AI-driven robotics space.
- Integration of Advanced Learning Models
Tesla's integration of large language models (LLMs) and vision language models (VLMs) is enhancing robot learning capabilities. According to Morgan Stanley, these models allow Tesla's robots, such as robotaxis and humanoids, to evolve at a pace on par with generative AI and data center technology growth led by companies like Nvidia (NVDA, Financial).
