Auto & Transportation

Tesla overtakes Ford to become Morgan Stanley's "top pick" in the US auto industry.

Tesla overtakes Ford to become Morgan Stanley's

By Kajal Sharma - 29 Jul 2024 11:08 PM

July 29 (Reuters) - Following Morgan Stanley's designation of Tesla (TSLA.O), opens new tab as its "top pick" in the U.S. car industry, the most valuable automaker outperformed Ford (F.N), opens new tab, by over 6% on Monday. According to the brokerage, investors are likely to concentrate on companies that handle climate change-related challenges, therefore Tesla's energy sector has the potential to outperform the company's auto business in the future. As legacy automakers scale down their plans for EV expansion, it also anticipates Tesla to establish a more dominating position in the market for zero-emission vehicle credit revenue, for which it recognized around $2,000 per unit in the second quarter.

"We estimate Tesla may account for as much as half the credit sales in the market, supporting a 100% margin business for Tesla that may not be anticipated by the investment community at this time," analysts at Morgan Stanley stated. However, Tesla missed Wall Street profits estimates for the second quarter and announced its lowest profit margin in over five years last week. This was due to the Elon Musk-led company offering steep discounts on its vehicles to offset declining demand.

 

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