With Full-Self Driving looking like it is decades behind its competitors and Tesla still unable to consistently turn a profit from selling vehicles - and during the same week the company's CEO testified at a trial where he had to defend allegations of bailing himself out by acquiring a failing solar company that was run by his cousin at the time - Morgan Stanley's Adam Jonas must of felt like he needed to dig deep into the bag of batshittery to defend his $900 price target of the company.
And, never one to disappoint, dig deep he did. Jonas put out a note on Thursday morning claiming that "the chance that Tesla does not ultimately offer products and services to the Electric Vertical Take-Off and Landing (eVTOL) and Urban Air Mobility (UAM) market is remote."
His note was titled: "Tesla Aviation: Not 'If' But 'When'?"
Hilariously in his note, Jonas takes exception with the fact that no one has brought up Tesla as an up and coming option for aviation yet.
Following the publication of our May 6th Global Foundation report: eVTOL/Urban Air Mobility TAM Update: A Slow Take-Off, But Sky's the Limit, what stood out from our many discussions with companies and investors on the future of Electric Vertical Take-Off and Landing (eVTOL) and Urban Air Mobility (UAM) was the absence of consideration of one company that is aggressively industrializing EVs, AVs, battery storage, connected car networks and EV infrastructure. Why is Tesla not mentioned in the e-aviation narrative?
We'll tell you why, Adam: perhaps no one considered that a company building poorly put together cars in a tent was just doing to "swoop in" to the even more capital intensive aviation industry and just start cranking out planes (we assume there would have to be a second tent built).
Another great reason to consider Tesla getting into aviation? The fact that Elon Musk has been "dismissive" of it!
On the rare occasions when Mr. Musk is directly asked about eVTOL, he has been dismissive of the ‘flying car’ genre in favor of advancing the state of 3-dimensional transport via tunnels or in space. So we must acknowledge that Tesla management has, to date, openly discouraged speculation around their involvement in eVTOL/UAM.
But, as Jonas says, "we're not convinced!" And to prove it, the note includes this Softbank-slide-inspired diagram:
And for the grand finale of Jonas' note, right about where he discloses "Tesla has not commented on any potential aviation related product or service", he lays out his justification for this non-existent business that Elon Musk has been dismissive of and that Tesla has never mentioned for adding $100 to $1000 per share to Tesla's share price.
Remember when it was Robotaxis and Full Self Driving that was driving Jonas' insane price predictions? Those we're the good ole' days. But maybe more concerning about Jonas' "pivot" to another insane business segment that doesn't exist for Tesla yet to justify his price target is question of whether he has left the concept of Tesla Mobility, Robotaxis and FSD for dead? Could this move to aviation also tacitly be an admission of defeat elsewhere for Tesla?
FinTV: “We are now going to grill this short-seller on his specious gross margin calculations…Next up, Adam Jonas will tell us why $TSLA flying cars are worth $1 trillion!”— Diogenes (@WallStCynic) July 15, 2021