Tesla (TSLA) could see its stock price skyrocket by $1,000 if it taps into what Morgan Stanley is calling the emerging “low altitude economy.”
In a recent note, the firm argued that Tesla is uniquely positioned to disrupt a future $9 trillion market for autonomous drones, applying its strengths in battery storage, robotics, manufacturing, and autonomy to both commercial and military aerial platforms.
“All future wars will be fought with drones,” the analysts wrote, citing Ukraine’s latest drone strikes against Russian forces. They added that China now manufactures more drones annually than the U.S.
Tesla hasn’t announced any drone-related plans publicly. But Morgan Stanley believes the company’s core technology stack gives it an edge in what could be the next frontier for automation.
A $1,000 rally would represent a more than 300% gain from Thursday’s closing price of $318, which already marked a 40% rebound from Tesla’s April low. The stock is now closing in again on a $1 trillion market cap.
Despite gaining 81% over the past year, Tesla’s performance in 2025 has been riddled with red flags, from slumping global sales to mounting backlash over Elon Musk’s political alliances.
Tesla needs to solidify its ground game before reaching for the skies
According to InvestorsObserver, Tesla registrations have collapsed across Europe this year. France is down 67%, Portugal 68%, Denmark 30%, Spain 19%, and the Netherlands 36%.
That’s largely a result of controversy around his high-profile role in President Trump’s White House as head of the Department of Government Efficiency, a move that’s alienated many of Tesla’s historically progressive customers.
At the same time, the EV market is getting more crowded. Chinese automaker BYD led global EV sales as of March 2025, with Tesla ranking second but trailing far behind, according to industry data.
Other legacy rivals like Geely, Wuling, BMW, Volkswagen, and Mercedes are also closing in fast.
Tesla’s Q1 earnings laid bare the fallout. The company delivered just 336,681 vehicles, a 13% drop from the same period last year. Automotive revenue fell 20% year-over-year, leading to a staggering 71% decline in profitability.
In response, Musk has pledged to devote more time to running Tesla, stepping back from his government post. But it’s still unclear whether Tesla’s traditionally progressive customer base will return.
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