Most analysts at most investment banks perform their coverage of assigned public companies by looking at data, projecting industry trends, evaluating leadership and providing the most accurate rating they can to clients.
But when analysts cover Tesla, the preparation for coverage seems to be more along the lines of lighting some incense, blasting some Fatboy Slim tunes, popping some Ambien, kneeling before an Elon Musk poster and just telling clients and the world that "I BELIEVE!"
Morgan Stanley's Adam Jonas knows what we're talking about. He and Elon have been on a rollercoaster of love, but it seems like things they are once again "an item." In a note published today, Jonas made this call on Tesla's long-term production abilities:
By early 2023, we forecast Tesla’s car population to have multiplied 10x compared to year-end 2017. Looking a bit further out to 2040, we forecast the total number of Tesla vehicles in use (including Tesla Mobility and Tesla Consumer and net of scrappage) to be nearly 32 million units, or 107x higher than the 2017 level.
Wow! That's a lot of fucking cars man. Especially since some analysts predict that Tesla would have to increase production by 80% in 2018 to see a mere 531,000 Teslas on the road by the end of next year.
And by "some analysts," we mean Adam Jonas...in this note...in the sentence right before the passage predicting the figure of 32 million.
But we're not here to mock Adam Jonas, because Adam Jonas is doing his job the only way he can; by evaluating Tesla through a prism of belief rather than using the optics of numbers and logic. As we've said before, Tesla is a company predicated on messianic faith in Lord Elon. How you feel about his ability to make miracles appear like he does with cars and space rockets will dictate how you feel about his chances of turning Tesla into a bona fide automotive giant. You are either a believer or a infidel, there is no middle ground.
Jonas does outline some potential risks for Tesla going forward (inadequate infrastructure, increased demand, cars being built to fast to be safe, blah blah blah), but there is one sentence that sums up perfectly not just Jonas' feelings on Tesla, but the entire journey of personal faith that is coverage of Elon Musk's car company:
It has been generations since the investment community witnessed such a high growth rate in the population of a single auto firm.