Morgan Stanley analysts estimate Tesla’s strategic shift toward large-scale solar manufacturing could add $20 billion to $50 billion in equity value to its energy division. The firm identifies long-term growth potential in the vertical integration of solar panels with energy storage systems.
Despite the valuation upside, Morgan Stanley maintains an Equalweight rating due to significant capital requirements. The bank doubled its 2026 capital expenditure forecast for Tesla to more than $20 billion.
This spending surge is expected to pressure short-term profitability and result in negative free cash flow through 2028. Morgan Stanley projects a cash burn of $8.1 billion for the 2026 fiscal year.