I am reading Morgan Stanley’s February 12 report on Tesla (TSLA) titled “Tesla EV Infrastructure: A competitive moat?”: Tesla's charging network called a 'competitive moat'
One would think that a report discussing an alleged competitive advantage would naturally include an actual comparison with specific competitors. Hey, at least *one* competitor, such as the leading one, in the largest geography or two, perhaps three.
But no, this Morgan Stanley report does not say a peep about any competitor. Let’s start with the United States.
In the U.S., Electrify America, which is owned by The Volkswagen Group, is in the middle of spending $2 billion in electric car chargers. Might Morgan Stanley talk about how this $2 billion spend compares to Tesla’s spending on electric car chargers?
No. Not a word about that.
I understand that Tesla has refused to be transparent about its spending on chargers, and that’s bad. However, isn’t it then Morgan Stanley’s job to estimate what this amount is, and compare it with the $2 billion that Volkswagen is spending right now, through its Electrify America entity?
For example, where does Morgan Stanley think Electrify America will be in two, four and six years from now? Crickets.
Furthermore, Electrify America is deploying 350 kW chargers. Tesla’s chargers are 120 kW (or thereabouts). On top of that, Tesla feeds multiple cords with one power source, so you might share that 120 kW with another car, which means you would get 60 kW (half of 120 kW). Would Morgan Stanley discuss how this compares with how Electrify America does it? Apparently not.
Same thing in Europe: Ford, VW, BMW and Daimler joined together to form Ionity. It looks fairly similar to Electrify America in the U.S. Does Morgan Stanley describe how Ionity compares with Tesla? No, the word “Ionity” isn’t even mentioned in the report, just like it didn’t mention “Electrify America” in the context of competition in North America.
Where does Morgan Stanley estimate Ionity will be in two, four and six years from now? Crickets.
How does one write a report about a company, especially having “a competitive moat” -- without mentioning the leading competition? Morgan Stanley has managed the impossible: Talking about competition without mentioning, let alone analyzing, the most important competitors.
You can see the Electrify America network here: Our Plan | Electrify America
You can see the Ionity network here: IONITY - ABOUT
Disclosure: I am/we are short TSLA.
Additional disclosure: At the time of submitting this article for publication, the author was short TSLA and long FCAU. However, positions can change at any time. The author regularly attends press conferences, new vehicle launches and equivalent, hosted by most major automakers.