Tesla (NASDAQ:TSLA) is set to make a significant presence in the U.S. energy market, driven by the increasing demand for power caused by the AI industry. By 2030, it is projected that U.S. data center power consumption will be comparable to the energy used by 150 million electric cars, which is equivalent to adding 59 million EVs to U.S. roads, a 21% increase in the total number of vehicles. This surge in power usage presents an opportunity for Tesla (TSLA) to capitalize on its unique position in the electric grid and drive growth in its energy storage business.
Morgan Stanley predicts that Tesla’s storage business, in terms of gigawatt-hours (GWh) deployed, will grow faster (29% CAGR) than its solar business (24% CAGR) from 2020 to 2040, yielding higher profit margins compared to its core auto business. The firm estimates that Tesla (TSLA) Energy could generate $3.95 billion in net operating profit after tax (NOPAT) by 2030, resulting in over $1 of earnings per share. This growth potential has led Morgan Stanley to value Tesla’s Energy business at $130 billion, equivalent to $36 per share of Tesla (TSLA).
While Tesla (TSLA) is increasingly competing with companies like Fluence Energy (FLNC), the rapid expansion of the energy storage market suggests that both companies stand to benefit from increased demand for power sources and solutions that support sustainable energy production and consumption. As such, Morgan Stanley has set a price target of $310 for Tesla (TSLA), with shares rising 0.58% pre-market to $183.64 as investors recognize the potential for this company’s continued growth and success in driving sustainable energy solutions across industries like AI and beyond.
