MORGAN STANLEY: Buy these 25 non-Tesla stocks to cash in on the electric-car revolution

• Morgan Stanley says Tesla's electric car business should be profitable later this year.
• They think that proof of profitability will unleash a wave of spending in the growing industry.
• A team of analysts says that will create a domino effect of investment decisions for companies that make equipment for electric cars and charging stations.
• They name 25 of the biggest potential beneficiaries of that shift, and predict that sales penetration for electric vehicles will surpass that of internal combustion vehicles in the 2030s.
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Tesla is off to the races, but a lot of other companies that stand to benefit from rising demand for electric cars are still at the starting line.

A team of Morgan Stanley analysts predicts a wave of enthusiasm in the still-young industry, and writes that Tesla's battery-powered vehicle manufacturing will become profitable this year as its new factory in Shanghai ramps up.

They say that milestone - and proof of concept at scale - will change the spending patterns for makers of semiconductors, batteries, chemicals, and those involved in mining, energy, and making charging stations.

"There are a multitude of second derivatives players that are interdependent in the EV ecosystem and touch many industries across the globe," the team wrote.

Here's how they describe the effects for original equipment manufacturers as they put more money into battery electric vehicles:

"If Tesla can indeed prove that EVs can be profitable at scale, we believe this would remove one of the key impediments preventing legacy OEMs from shifting capacity to BEVs, potentially unleashing further waves of investment into the BEV production ecosystem and its supporting infrastructure."

They add that that will start an evolution that makes electric vehicle components more profitable for those companies. And as sales climb, cost fall, and profitability improves, they thinks the effects will be dramatic.

Today, Morgan Stanley estimates that sales penetration for electric vehicles is only at 2% worldwide. But they think that will jump to 11% in five years, 24% by 2030, and 70% in 2040.

They say their best idea for taking advantage of that shift is "through large cap, credible battery companies with a proven track record such as CATL, Samsung SDI, Panasonic and LG Chem."

But they've found more than 20 other companies that could be major beneficiaries.

Listed below are the 25 stocks they expect to have the most potential as investors embrace growing demand for electric vehicles and improving infrastructure for them. Almost all of them are based in Asia, and they may be less familiar to US investors.

The stocks are arranged from lowest to highest based on how much they would have to rise to reach Morgan Stanley's current price targets.