Morgan Stanley analysts highlighted that diesel prices have surged above $6 a gallon for the first time, marking a more than 60% increase compared to last year. This spike is attributed to reduced global refining capacity due to ongoing conflicts in Iran and Ukraine. In light of these rising costs, the analysts see a favorable opportunity for Tesla's electric semi truck.
Tesla has commenced production of its semi and aims to implement self-driving technology by early 2027. According to Morgan Stanley, an autonomous Tesla semi could reduce operating costs by 20% per mile compared to traditional diesel trucks, while also significantly increasing annual mileage to over 215,000 miles.
This could lead to a dramatic increase in profit per truck, projected to rise over 400% to approximately $202,000 annually, compared to nearly $37,000 for diesel trucks. Additionally, Tesla could earn between $12,000 and $18,000 monthly from its autonomous driving software.
Despite these promising projections, CEO Elon Musk indicated that Tesla Semis will constitute a small fraction of the overall vehicle fleet through the end of this year. Morgan Stanley maintains an equal-weight rating on Tesla, with a price target of $400, suggesting a potential upside of 10% from the recent closing price of $363.56