Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Morgan Stanley on Tesla and China: 'Tesla is highly exposed'

Stock Markets Aug 03, 2022 08:04AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Morgan Stanley's Jonas on Tesla (TSLA) and China: 'Tesla is highly exposed'

By Michael Elkins

An analyst from Morgan Stanley wonders if investors appreciate the opportunity and risks involved with depending on China for electric vehicle battery supplies.

According to Morgan Stanley, China accounts for over 30% of Tesla’s revenues and as much as 50% or more of its profitability. China also supplies 50% of global battery shipment and 50-75% of global battery materials including the cathode, anode, separator, and electrolyte, making China a key player in advancing the cause of electrifying the global roadways, Morgan Stanley says separately.

As globalization evolves, the analyst believes that “the race for global EV battery dominance goes hand-in-hand with geopolitics and national security”.

Pelosi landed in Taipei, Taiwan’s capital, on Tuesday. Pelosi’s trip makes her the highest-ranking US politician to visit the island in 25 years, and Chinese officials have called it “provocative”.

Contemporary Amperex Technology Co Ltd (CATL), the world’s biggest maker of batteries for electric vehicles, has its headquarters in Fujian, across the Taiwan Strait from the island. CATL has been considering sites in the US, for a plant. The multibillion-dollar North American plant would supply Tesla Inc (NASDAQ:TSLA) and Ford Motor Co (NYSE:F).

CATL has been in the advanced stages of site selection and was preparing to announce its selection in the coming weeks. However, according to Bloomberg, Nancy Pelosi’s trip to Taipei has caused tensions to rise to the point that CATL decided to push back announcing the plant until September or October. The report cites people familiar with the process saying that CATL’s concern is that an announcement could stoke tensions at a sensitive time.

Neither CATL nor Tesla have issued a public comment on the story.

As companies like CATL weigh their options based on geopolitical circumstances, investors may have to consider those circumstances as well. The analyst believes that Tesla’s renewable energy infrastructure is currently undervalued and overlooked for what it is. He believes “events over the past 6 weeks and catalysts over the next 6 months will materially shift the narrative around what Tesla does, the markets they address, the growth profile and the global/strategic implications of the ecosystem on which they sit atop.”

Morgan Stanley on Tesla and China: 'Tesla is highly exposed'

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Sasha ZZ
Sasha ZZ Aug 04, 2022 5:02AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Realy where usa companies are?
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email