Morgan Stanley Says Surging Diesel Prices Strengthen Tesla Semi Case

According to CNBC, Morgan Stanley analysts said surging U.S. diesel prices strengthen the case for Tesla's Semi truck after diesel rose above $6 a gallon for the first time on Friday, more than 60% above the same period last year, according to AAA data. The bank said fuel costs are climbing as the Iran and Ukraine wars reduce global refining capacity. Morgan Stanley analyst Andrew Percoco said Tesla's electric Semi could cut costs by 20% per mile versus a human-operated diesel truck and lift annual mileage to more than 215,000 miles, or 133% above current levels. The bank estimated annual profit per truck, excluding overhead, could rise more than 400% to about $202,000, compared with nearly $37,000 for a human-operated diesel vehicle, and said Tesla could generate about $12,000 to $18,000 a month per truck from autonomous driving software. Tesla CEO Elon Musk said on the company's July earnings call that production has started on the electric Semi and that the company plans to get self-driving working on the vehicle early in 2027. Morgan Stanley kept an equal-weight rating on Tesla and a $400 price target, implying 10% upside from Thursday's close of $363.56.