Morgan Stanley: Tesla is moving towards software supplier direction

With the continuous development of Tesla’s Full Self-Driving (FSD) technology, the value of Tesla as a technology stock has also become prominent. According to Bloomberg, Morgan Stanley has upgraded Tesla’s rating to “overweight” for the first time in three years, with a target price of $540. Analyst Adam Jonas pointed out in his research report that Tesla seems to be following in the footsteps of Apple, moving towards becoming a software service provider.

Jonas further explained that, as the CEO of a tech giant, Tim Cook increased Apple’s revenue through software services, leading competitors. Tesla will follow a similar path in the future. Tesla is about to transition from a single model of selling cars to developing high-profit, high-usage software and providing services.

The Morgan Stanley research report also pointed out that, like many other tech companies, Tesla’s transformation is significant. By providing high-profit services, they can effectively improve the user experience and platform stickiness.

For a long time, there has been a debate about Tesla’s corporate identity. Currently, Tesla is not just a car manufacturer, especially considering Tesla Energy, Full Self-Driving (FSD), self-made chip development software, and other facts, all of which show that Tesla is more like a tech giant.

This explains why Tesla owners are very loyal to the company. First, Tesla’s range of services can attract new customers, like Apple. At the same time, the services create strong loyalty to the brand, which is also why Apple users find it difficult to leave the Apple ecosystem.

🔗Source: Teslarati, Bloomberg

This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email