Morgan Stanley still loves Tesla: Morgan Stanley recently said Tesla (NASDAQ:TSLA) is a top choice, giving it a thumbs-up with an Overweight rating and a target price of 0.00 for the next 12 months. This comes after the UAW (United Auto Workers) made some big moves during talks with Detroit’s major automakers.
Well, they brought back something called Cost of Living Adjustments (COLA) in the auto world.
COLA used to be a bit of a no-go area in talks with car companies and the UAW. It adds a bit of uncertainty to guessing how much workers’ pay might go up in the long run.
Morgan Stanley still loves Tesla
Ford (NYSE:F) spills the beans that the UAW deal means an extra 0 to 0 for each car, slowly eating into about 200 basis points of profit before any fixes are made.
So, why should we care about this in other parts of the world?
Morgan Stanley experts think these new work deals could be good news for places like China, Mexico, Thailand, and Vietnam. Why? Because companies around the globe benefit when there’s a big difference in how much workers get paid.
With these new deals in the bag, investors might see car makers teaming up more with their pals making Electric Vehicles (EVs) in China.
But hold on, there’s a twist. As more people slow down on picking up EVs, Morgan Stanley folks think the plans made for these cars in the last three years might not have thought about how quickly pay is going up for workers in the US. Once the UAW deals get a green light, car companies might hit the brakes on their EV plans. More info about Morgan Stanley still loves Tesla, calling it their ‘Top Pick’ even after UAW changes!
What could this mean for Tesla?
The UAW leaders want to bring more companies into the fold, so some international car companies are already thinking about paying their workers more.
Think about Tesla, with around 45,000 to 50,000 folks working in places like Fremont, Austin, and Reno. These spots have higher living costs compared to the average UAW worker. Add it all up, and Tesla’s looking at a US labor cost somewhere between billion and billion.
Can Tesla’s cool-sounding Optimus help out?
Even before robots started walking around, the Morgan Stanley experts were predicting big changes in how cars are designed. They think we’ll need new methods and tech that aren’t quite ready yet to make cars in the US that can compete on the world stage.
Right now, Tesla’s stocks are up by 4.63% in the middle of the day on Tuesday.