Morgan Stanley Goes All-In On Tesla Battery Day, Upgrades Stock

When a company wants to get into the electric vehicle industry, batteries are arguably the biggest concern. Without them, you can't have an electric vehicle whether it be a hybrid, hydrogen or full battery electric vehicle.

Batteries are also in short supply, with the world limited in the amount it can produce.

The Tesla Analyst: After Thursday's close, Morgan Stanley analyst Adam Jonas upgraded Tesla Inc's TSLA stock from Underweight to Equal-Weight and raised his price target from $1,050 to $1,360.

The Battery Thesis: Tesla already makes its own batteries in collaboration with Panasonic PCRFY, and it looks like Tesla will only be advancing the company's battery manufacturing prowess.

Morgan Stanley also downgraded other EV battery manufacturers in anticipation of Tesla's battery day, which will take place on Sept. 22.

"The Tesla Battery Day...could be a game changer, and based on what we know so far, there is growing risk of Tesla becoming a new battery competitor armed with superior technology," Jonas wrote in the note.

"Based on the body of evidence collected and research conducted by our tech colleagues, we now give Tesla credit for a 3rd party battery / EV powertrain supply business in our base case (previously in our bull case scenario) that is worth $310/share," Jonas wrote.

Benzinga's Take: It looks like not only are Tesla fans excited for Tesla's battery investor day, but now big investment firms are showing interest. If Tesla really can revolutionize battery technology, the company's cars can become lower cost, with an even higher range than the industry lead the company currently holds. The batteries may also be used in home and industrial storage applications.

Tesla is also expected to announce updates to its Model S and X plaid power trains, which will take advantage of the new million-mile battery technology.

Tesla's stock closed Thursday higher by 4.2% at $1,621.