Morgan Stanley said Tesla‘s plan to add 100 GW of solar manufacturing capacity could boost the company’s equity value by as much as $50 billion, as CEO Elon Musk pursues an ambitious vision of deploying solar-powered data centers in space.
Analyst Andrew Percoco reiterated an Equalweight rating and $415 price target on Tesla in a research note Tuesday — implying a 0.6% downside from the stock’s latest closing price of $417.32.
Morgan Stanley downgraded Tesla to Equalweight from Overweight last December, marking the firm’s first rating cut on the company since June 2023.
Percoco replaced Adam Jonas as automotive analyst at Morgan Stanley after Jonas moved last August to a broader role focused on AI and humanoid robots.
“We believe Tesla‘s plan to vertically integrate solar manufacturing is representative of Elon Musk’s goal to send a significant amount of solar-powered data centers into space, while also driving synergies with its leading energy storage business,” Percoco wrote.
Bloomberg reported last week that Tesla is considering “multiple sites” across the US to start production of manufacturing solar cells — citing people familiar with the matter.
The firm estimates Tesla‘s solar business could add $20 billion to $50 billion — or $6 to $14 per share — to the company’s energy division, which Morgan Stanley currently values at $140 billion, or $40 per share.
Hiring Push
As reported by Reuters last week, Tesla has opened new positions to support its plans.
Seth Winger, the company’s senior manager for solar products engineering, described the effort as “an audacious, ambitious project” in a LinkedIn post last week.
A job posting on Tesla‘s website for a solar manufacturing development engineer cited by Reuters stated the company’s goal is to “deploy 100GW of solar manufacturing from raw materials on American soil before the end of 2028.”
Strategic Rationale
While the solar investment may not be material to Tesla‘s valuation on a standalone basis, Percoco argued the capital allocation could be justified by growth opportunities from vertical integration of solar and energy storage.
“In the absence of this investment, Tesla could run the risk of facing significant energy-related bottlenecks that handcuff its ability to achieve its broader goals across other businesses,” he wrote.
The analyst suggested Tesla‘s solar ambitions are tied to Musk’s vision of “sending data centers to space with limited supply chain bottlenecks.”
Musk’s Solar Push
Musk has increasingly emphasized solar energy in recent months, framing it as essential to both terrestrial and space-based infrastructure.
“Solar is not A source of energy, it is THE source of energy,” Musk wrote on X last month, responding to data showing China installed more than twice as much solar capacity in the first half of 2025 as the rest of the world combined.
Earlier this month, Musk praised China’s manufacturing capabilities.
“China is an amazing powerhouse of manufacturing and understands very well that solar is the future. It’s just a fact!” he wrote on X last week.
In November, Musk said that “a large solar-powered AI satellite constellation would be able to prevent global warming by making tiny adjustments in how much solar energy reached Earth.”
