Tesla (TSLA) Stock: Morgan Stanley Sees $50 Billion Value Boost From Solar Push

TLDR

• Tesla plans to build 100 GW of annual solar manufacturing capacity, requiring $30-$70 billion in investment not included in 2026 capex guidance
• Morgan Stanley values Tesla’s energy business at $140 billion and estimates the solar expansion could add $20-$50 billion in equity value
• The 100 GW capacity would make Tesla the largest U.S. solar manufacturer, dwarfing current leader First Solar’s projected 17.7 GW by 2027
• A large portion of the solar capacity is expected to power data centers in space, aligning with Musk’s goal to avoid energy bottlenecks
• Fully scaled solar operations could generate $25 billion in annual revenue and $3-$4 billion in additional EBIT for Tesla

Tesla CEO Elon Musk unveiled plans to build 100 gigawatts of annual solar cell manufacturing capacity in the United States. The move represents a major bet on renewable energy at a time when the company’s electric vehicle sales face headwinds.

Tesla, Inc., TSLA

The ambitious plan would require capital investment between $30 billion and $70 billion. This spending is not covered by Tesla’s $20 billion capex guidance for 2026, which already includes six factories and AI infrastructure.

Morgan Stanley values Tesla’s current energy business at $140 billion. Analysts Andrew Percoco and team believe the solar expansion could add $20 billion to $50 billion in equity value to that segment.

The bank currently assigns $40 per share to Tesla’s energy business within its $415 price target. A successful solar ramp-up could push that valuation to $190 billion.

If fully scaled, the vertically integrated solar and storage business could generate $25 billion in annual revenue. Morgan Stanley estimates the operation would produce $3 billion to $4 billion in additional EBIT.

Manufacturing Scale and Strategic Vision

The 100 GW target would easily make Tesla the top U.S. solar manufacturer. First Solar, the current industry leader, expects 14 GW of American capacity in 2026 and 17.7 GW by 2027.

Tesla plans to integrate across the entire solar supply chain. This spans from raw materials through finished solar panels.

The company is evaluating multiple U.S. sites for production facilities. New York, Arizona, and Idaho are under consideration, according to sources familiar with the plans.

Tesla has already started hiring for the project. Seth Winger, senior manager for solar products engineering, called it “an audacious, ambitious project” in a LinkedIn post two weeks ago.

Morgan Stanley believes much of the 100 GW capacity will power data centers in space. This aligns with Musk’s goal to avoid energy bottlenecks that could limit Tesla’s broader objectives.

Financial and Strategic Considerations

How Tesla will finance the solar push remains unclear. The company recently opened the largest lithium refinery in the United States at Corpus Christi, Texas.

That facility converts spodumene ore directly into battery-grade lithium hydroxide. The process represents a first for North America and reduces dependence on Chinese lithium resources.

Morgan Stanley argues that vertical integration could justify the solar investment. The analysts believe the decision is rooted in long-term strategic thinking around geopolitics and data center demand.

Tesla has struggled to achieve mainstream adoption of its current Solar Roof product. The new manufacturing plan represents a different approach focused on industrial-scale production.

The global solar market currently sits in surplus. Morgan Stanley expects Tesla’s capacity to serve specialized applications, insulating it from traditional supply-demand dynamics.

Tesla is considering the solar expansion as rising power needs from next-generation data centers create new demand. The bank views this as a strategic opportunity linked to the company’s energy storage business.

The company is hiring engineers and scientists to support the massive scale-up. Job postings emphasize the ambitious nature of the undertaking and the need for technical expertise across multiple disciplines.

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