Morgan Stanley Floats Possibility of Tesla Entering ‘Flying Car’ Niche

Morgan Stanley analyst Adam Jonas has floated the possibility that Tesla could enter the flying car market by 2050 in a memo obtained by Business Insider. He says that flying cars could be worth up to $1,000 per Tesla share (NASDAQ:TSLA).

Although Tesla apparently has no current plans to build a flying vehicle or provide services for any future flying car market, Jonas cited Elon Musk’s panache for imagining futuristic concepts:

“The chance that Tesla does not ultimately offer products and services to the [flying car] market is remote. … We’ll have Teslas on our roads, underground in tunnels… on Mars. But not in Earth’s skies? Well… we’re not convinced” that Tesla won’t ever touch flying vehicles with a 40-foot pole, Jonas said.

Of course, this is just speculation at this point, but any future flying vehicles that Tesla might design could see a potential addressable market of up to $9 trillion by 2050. Currently, the use of a privately owned airplane only requires its pilot to have a private pilot’s license. (Sport licenses are also available, though sport pilots are usually limited to lighter and lower-powered planes than a private pilot is legally allowed to fly.)

A sport or private pilot’s license requires a minimum number of hours working with a flight instructor, plus the ability to pass a written exam and final flight exam, which can discourage people who don’t have the money to pay for flight lessons unless they can find a scholarship. However, the idea of sport pilots flying around in “flying cars” could be an attractive one for people who have grown up on entertainment options like the cartoon show The Jetsons.

Adam Jonas says $900 is a good price target for Tesla shares, though he says that this price target doesn’t include theoreticals like a Tesla-built flying vehicle that will likely be either electric or a hybrid. He cited Tesla’s popularization and development work of electric vehicles and the technology behind Tesla’s products, including batteries and fully autonomous driving.

A “flying car” equivalent of autonomous driving vehicles could take the risk of potentially hazardous pilot error out of the picture. Aviation industry insiders have floated the possibility of an automated “air taxi” for passengers at industry events like the annual AIAA conferences. Tesla’s work on creating fully autonomous vehicles includes the recent release of Full Self-Driving Version 9 beta, which it says includes several important updates that include better handling of non-highway driving. Elon Musk does warn beta users to “be paranoid” about using it, though. Although he admits that creating the software for fully autonomous vehicles is more difficult than he first thought, he seems unwilling to give up on creating a fully functional version that could finally take a potentially error-prone human driver out of the picture.

Autonomous operation of flying vehicles would, of course, add an extra dimension of complexity if Tesla does eventually decide to get into the flying car market. Although the company does not officially have plans to yet, analysts like Morgan Stanley’s Adam Jonas are willing to consider the possibility that it will eventually.