Why This Tesla Analyst Thinks This 'One Really Big Item' Could Be Part Of Master Plan Part 3

Tesla, Inc. TSLA CEO Elon Musk tweeted a week back that he's working on the EV maker's "Master Plan part 3," and subsequently shared some sketchy details about what could go into the plan.

The Tesla Analyst: Morgan Stanley analyst Adam Jonas has an Overweight rating and $1,300 price target on Tesla.

The Tesla Thesis: An energy grid is "one really big item" Tesla should be focusing on, as the events of the past month has reinforced the concept that "energy security = national security," Jonas said in the note.

The analyst made the case for an electric grid, even if Tesla isn't explicitly including it in the plan. The U.S. electric grid, in its current state, is not yet ready for mass EV adoption, the analyst added.

"Tesla is uniquely positioned to accelerate necessary re-architecting of the US grid including making the entire vehicle population (or ‘parc') an essential ingredient of the distributed energy ecosystem," the analyst emphasized.

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Assuming 100% of the 250 million light vehicles on the road in the U.S. were EVs, consuming 80 kilowatt-hours of usable storage per vehicle, the total storage potential would be 20 terawatt-hours, Jonas estimates. U.S. energy consumption was 3.7 Twh in 2020, the analyst noted. This implies that the cars, at least in theory, would store an equivalent of about 2 full days of U.S. electricity demand, he added.

"Including the car in this mobile, connected/crowdsourced, distributed grid could have a profound impact on the future of energy architecture, renewables, economics, and business model," the analyst said.

It wouldn't come as a surprise if a vehicle-to-grid/bi-directional charging capability is made a requirement for all vehicle sales at some point in the future, Jonas said.

TSLA Price Action: At press time, Tesla shares were rallying 0.38% to $997.78.

Photo: Courtesy of John K Thorne on Flickr