As Tesla aims to bring an affordable $25,000 electric vehicle to market, all eyes are on its battery partner CATL to deliver the goods. Morgan Stanley’s Adam Jonas is betting big that this “power couple” can supercharge EV adoption in the US.
In a new $TSLA note, Adam Jonas doubled down on his bullish Tesla overweight rating, stating “We know it’s very hard to imagine today…but we eventually expect to potentially see a load of new product coming out of Tesla and expect the stock to eventually price this in well ahead of their respective launches.”
He argues that Tesla’s current lineup leaves over 80% of the US market completely unaddressed by segment and volume. But an affordable model enabled by next-gen batteries from CATL could change the game:
“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 $25k EV and drive EV adoption in the US.”
CATL Firing on All Cylinders for Tesla’s Mass-Market Ambitions
For its part, CATL seems locked and loaded to provide the battery muscle needed for Tesla’s ambitious $25k master plan. The company’s founder and CEO Robin Zeng revealed CATL is working on faster charging cells tailored for the attainable EV.
“There’s always room for cost reduction depending on what the $25,000 car’s aim is,” Zeng said. “If it’s for robotaxis, we don’t have to worry about the cost reduction for each cell as our batteries have a longer life cycle and so their average cost is actually lower.”
An Affordable Tesla for the Masses is Just the Beginning
With over 80% of the US market currently untapped by Tesla’s lineup, Jonas sees plenty of room for growth once pricing becomes accessible. He even teased “an eventful 2H24” is on the horizon, potentially hinting at new products beyond just the $25k sedan.
Tesla new mass market $25K EV in 2025, codenamed “Redwood” is slated to begin production in mid-2025. If Tesla and CATL’s battery dream team can truly deliver affordability without compromise, the floodgates could open for mass EV adoption in the US. The $25k Tesla may be the key that unlocks ACCESS for the masses.
Related: Tesla $25K EV Project Restart Construction of the Third Phase of the Giga Shanghai Factory