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Tesla & CATL deemed the Power Couple to Recharge the US EV Market: Morgan Stanley

(Credit: Tesla)

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Morgan Stanley analyst Adam Jonas deemed Tesla and CATL the power couple that could recharge the United States electric vehicle (EV) market. 

In a note released earlier this week, Morgan Stanley writes that the United States is an under-penetrated EV market, whereas China is a fully-penetrated EV market. In addition, the United States has an under-supply of affordable EVs and cheap batteries for electric vehicles. Meanwhile, China has an oversupply of affordable EVs and cells in the battery market. 

The current political climate between the United States and China discourages Chinese battery suppliers like CATL from distributing their oversupply of batteries to the US. Even Europe is leaning towards domestically sourcing and supplying battery cells for electric vehicles. 

“In our view, this will require a degree of ‘westernization’ of Chinese tech to be palatable in the US given the rising protectionist sentiment (both in the US and Europe). At the same time, China is experiencing an over-supply in EV batteries and is seeking a conduit to offload (‘off-ramp’) supply via export opportunities,” wrote Morgan Stanley in its note

China-based battery supplier CATL might have found a way to offload its EV batteries to OEMs in the United States through Licensing, Royalty, and Services (LRS). Tesla seems to be the first company to collaborate with CATL through LRS. 

People familiar with the matter recently shared that Tesla and CATL are collaborating to develop a new fast-charging battery. Tesla also plans to use battery machines from CATL at Giga Nevada, which is currently in the midst of an expansion. 

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Morgan Stanley’s Adam Jonas sees great potential in Tesla and CATL’s recent collaboration. 

“In our view, Tesla is in a very strong position to ‘on-ramp’ Chinese EV tech to the US. In leveraging Chinese manufacturing know-how, Tesla can deliver a $25,000 EV (Model 2) and drive EV adoption in the US.

The investment bank reiterated its Overweight rating and $320 price point for TSLA. Despite its forecast about the TSLA-CATL power couple, Morgan Stanley still acknowledges the challenges to EV demand in the near term. However, it still predicts that Tesla will be a winner in EVs long-term.

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Maria--aka "M"-- is an experienced writer and book editor. She's written about several topics including health, tech, and politics. As a book editor, she's worked with authors who write Sci-Fi, Romance, and Dark Fantasy. M loves hearing from TESLARATI readers. If you have any tips or article ideas, contact her at [email protected] or via X, @Writer_01001101.

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Tesla to lose 64 Superchargers on New Jersey Turnpike in controversial decision

Tesla is set to lose 64 Superchargers on the extremely busy and congested New Jersey Turnpike.

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Credit: Tesla

Tesla is going to lose 64 Superchargers on the New Jersey Turnpike after a decision by the Turnpike’s governing body was made not to renew its contract with the automaker.

On Friday, Tesla revealed that the New Jersey Turnpike Authority (NJTA) had officially decided to choose a sole third-party provider for its electric vehicle infrastructure. This resulted in the NJTA not renewing its contract to keep Tesla Superchargers on the toll road.

The NJTA also requested, with its decision not to renew with Tesla, that the company decommission all 64 Supercharger stalls, an unprecedented decision that will remove these plugs from the turnpike, making charging more scarce on the busy roadway.

Tesla detailed the situation on Friday:

“The New Jersey Turnpike Authority (“NJTA”) has chosen a sole third-party charging provider to serve the New Jersey Turnpike and is not allowing us to co-locate. As a result, NJTA requested 64 existing Supercharger stalls on the New Jersey Turnpike to not be renewed and be decommissioned.”

Tesla said it has been preparing for the potential that the Turnpike Authority would make this decision for three years by building 116 Superchargers nearby to still supply drivers with reliable charging infrastructure.

The company also noted that its Trip Planner would adjust automatically.

There were also efforts to maintain a relationship that would benefit both the Turnpike and EV drivers who use it.

Tesla said it offered the NJTA various “above-market commercial items,” like an offer to build Superchargers at all New Jersey Service Plazas with equipment upgrades like screens and adapters for those companies who have gained access to its charging piles but need to utilize the NACS and CCS1 plugs.

The decision is one that seemed to baffle the company, especially as infrastructure is one of the biggest concerns among EV skeptics:

“Tesla always advocates for more infrastructure and co-location with additional third-party charging providers. This drives down costs through optionality, and accelerates EV adoption by having sufficient capacity to shoulder peaks. We expect that ~30 times more fast-charging capacity is needed to get to full EV adoption. NJTA’s decision to remove, rather than add, critical charging infrastructure is a setback for New Jersey’s EV adoption goals of 100% Zero-Emission New Car Sales by 2035. It removes Turnpike access to the most reliable (99.9% uptime), least congested (<1% waiters) and cost-effective (~30% lower $/kWh) charging. “

The company said it was more than willing to invest in Turnpike sites if the Authority or New Jersey Governor Phil Murphy wanted to reverse the decision.

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SpaceX hit with mishap investigation by FAA for Starship Flight 9

Starship’s ninth test flight has the FAA requiring a mishap investigation from SpaceX.

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Credit: SpaceX

SpaceX has been hit with yet another mishap investigation by the Federal Aviation Administration (FAA) related to the company’s ninth test flight of Starship earlier this week.

The FAA said the mishap investigation is “focused only on the loss of the Starship vehicle, which did not complete its launch or reentry as planned.” The agency said the loss of the Super Heavy booster is covered by one of the FAA’s approved test induced damage exceptions requested by SpaceX.

All of Starship and Super Heavy booster debris landed within the designated hazard areas, the FAA confirmed.

SpaceX Starship Flight 9 recap: objectives & outcomes

It said it activated a Debris Response Area out of an abundance of caution as the booster “experienced its anomaly over the Gulf of America during its flyback toward Texas. The FAA subsequently determined the debris did not fall outside of the hazard area. During the event there were zero departure delays, one flight was diverted, and one airborne flight was held for 24 minutes. ”

SpaceX has become accustomed to mishap investigations by the FAA, as they have been impacted by them on several occasions in the past, including on Flight 8. However, they are a precautionary measure and usually are resolved within a few weeks.

Flight 9 was one of SpaceX’s most eventful, as there were several discoveries during the launch. First, it was SpaceX’s first time reusing a Super Heavy booster, as the one utilized for Flight 9 was also used on Flight 7 in January.

Contact with the booster and Starship were both lost during Flight 9. SpaceX said the booster was lost “shortly after the start of landing burn when it experienced a rapid unscheduled disassembly approximately 6 minutes after launch.”

Meanwhile, Starship was set to make a splashdown in the Indian Ocean, but the vehicle was lost about 46 minutes into the flight, SpaceX said in a mission recap.

It was an improvement from the previous two flights, as both 7 and 8 resulted in the loss of Starship after just a few minutes. Flight 9 lasted considerably longer. These flights are also not intended to make it to Mars, despite what other reports might try to tell you.

These are ways to gain information for when SpaceX eventually tries to get Starship to Mars.

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Investor's Corner

Tesla bull writes cautious note on Robotaxi launch: ‘Keep expectations well contained’

Morgan Stanley’s Adam Jonas is more cautious about Tesla’s upcoming Robotaxi launch.

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Credit: Tesla

Tesla analyst Adam Jonas of Morgan Stanley is telling investors to be wary of the Robotaxi details CEO Elon Musk revealed this week, after a report seemed to land on the prospective launch date of the platform in June.

Earlier this week, a report from Bloomberg indicated Tesla had internally landed on a tentative date of June 12 for its Robotaxi launch in Austin. Shortly after, Musk detailed the successful testing Tesla has already performed without anyone in the driver’s seat.

Tesla lands on date for Robotaxi launch in Austin: report

He also indicated Teslas would self-deliver to customers in June.

Analysts are now sending out investor notes on the announcement Musk made, along with the Bloomberg report. Jonas’s note is more cautious than others.

Jonas believes Tesla needs to shed more details before investors and fans of the company get too excited. He believes there is more information that could be released, but until then, he is suggesting investors “keep expectations well contained.”

He wrote:

“As is typical for highly anticipated Tesla events, we would keep expectations well contained for the (reported) June 12th Cybercab launch event in Austin. However, we would look for a continued stream of updates for the performance and growth of the network thereafter (numbers of cars, miles, trips, etc.) in the days and weeks that follow.”

The tone of Jonas’s note contradicts that of Wedbush’s Dan Ives, who believes the “golden age of autonomous” lies in Tesla’s hands. He seems to believe Tesla will come through on its June 12 launch.

Tesla set for ‘golden age of autonomous’ as Robotaxi nears, ‘dark chapter’ ends: Wedbush

Morgan Stanley’s note is slightly more

Jonas is obviously still bullish, but is much more tentative to move forward with an attitude that communicates skepticism about what Tesla has revealed.

Jonas and Morgan Stanley have a $410 price target on Tesla shares with a ‘Buy’ rating. Tesla stock is trading at around $358 at 12:15 p.m. on the East Coast.

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