Tesla is like 'Apple 20 years ago,' Morgan Stanley says
- The similarities between Tesla and Apple are increasing, according to Morgan Stanley analysts.
- The bank's analyst who covers Apple says Tesla is like the tech firm was two decades ago.
- It may be time for Tesla to consider an operations chief to eventually continue Musk's legacy, they said.
Is Tesla a tech company or automaker?
That's been one of the key questions asked of Wall Street analysts in recent years. And depending on the shop, the name is usually covered alongside names like Ford and General Motors, or next to Amazon, Apple, and Uber.
Adam Jonas, one of the most well-known analysts to cover Tesla, falls into the former group. To address Elon Musk's parallels to tech visionaries, as compared to his Detroit counterparts, he called on another Morgan Stanley analyst who covers Apple to examine the similarities.
"There are parallels to draw between Apple under Steve Jobs and Tesla under Elon Musk," Katy Huberty said, according to a transcript of the conversation sent to clients by Morgan Stanley on Thursday.
"The question for Tesla from here is whether it also needs an operational leader, as Tim Cook is to Apple, in order to become a trillion-dollar company."
It's not the first time the question of a right-hand COO to aid Musk in day-to-day operations has bubbled up from investors, though the idea may gain more traction this time around given the billionaire's other corporate ventures, tussles with federal and local authorities, and even a new child. Musk has rebutted the idea, saying in 2018: "If you have anyone who can do a better job, please let me know. They can have the job. Is there someone who can do the job better? They can have the reins right now."
Still, Huberty maintains there's value to be found in a second-in-command to a founder's vision. Apple, after all, was able to capitalize on Steve Jobs' legacy to grow the company's market by nearly three times despite increasing geopolitical and social challenges.
"Nobody else will devote every ounce of themselves to a company like the founder," she said. "With a founder, the company becomes their life and their life becomes their company. There are both positives and negatives to that dynamic. Importantly, there can be some very good years of innovation and hyper-growth … but then there's a list of things that can become a distraction and it's just as important to surround a founder with strong business leaders and provide visibility int a longer-term succession plan."
So far, Musk's massive focus on Tesla has only been a positive. The billionaire has detailed long days and nights at the office, even sleeping at Tesla's factory.
Asked how investors view the two companies comparatively, Huberty said "they view Tesla in a way they viewed Apple 20 years ago." In other words, Tesla is "a company that thinks differently, that is incredibly innovative in a category that needs a spurt of innovation."