After his proposed acquisition of SolarCity Corp. was widely panned, Tesla Motors Inc. Chairman and CEO Elon Musk is turning to a "masterplan."
Musk generated a lot of buzz over the weekend when he teased the idea over Twitter.
Adam Jonas, who analyzes the electric carmaker for Morgan Stanley, sent out a note to clients this morning speculating on Musk's blueprint. According to Jonas, the so-called master plan might entail a system that owes more to public transport than the company's present model of vehicle ownership.
"We believe the missing piece could be an on-demand mobility service that complements Tesla’s skills in electric and autonomous vehicles," Jonas wrote. The analyst says that just selling cars to individuals won't remain a sustainable business model forever: "The auto industry is in the early metamorphosis from privately-owned model to a public transport utility," he says.
Tesla would have a head-start in tapping into what could be a much larger addressable market, said Jonas, as its relatively smaller exposure to "legacy systems," and its advantages in "machine learning," give the firm a solid foundation from which to adapt to these shifts.
Even while there remain a host of unknowns, Jonas says he has already modeled some of this into his sums for Tesla, anticipating a 5,000 vehicle "mobility service" by 2018. "A substantial proportion of our $245 price target is based on our valuation of Tesla Mobility," he writes.
Shares of Tesla have struggled over the past few years, hitting a high of $291 in September of 2014, but falling as low as $141 earlier this year.
Jonas is perhaps the most prominent analyst covering Tesla, due to his long-term and often creative predictions. While his price target for Tesla shares was once $465, he dropped it down as low as $245 last week. He has not changed that call in this note.
The analyst may be taking the time to reiterate his priors here; he's long been promoting the idea that Tesla could be the starring player in a world with autonomous, electricity-powered public transport.
When Jonas broached the subject with Musk in November, the Tesla CEO laughed — but conceded that it was "quite a smart question, actually."