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Tesla Playing Quidditch While EV Rivals Hockey Around Mining Goals: Morgan Stanley Analyst

By Rachit Vats

Tesla Inc’s (NASDAQ: TSLA) moves to secure the supply of critical battery materials via acquisitions or deals will be a cue for what the rest of the industry plans to do next amid growing demand for electric vehicles, according to Morgan Stanley.

The Tesla Analyst: Morgan Stanley analyst Adam Jonas has maintained an ‘overweight’ rating and a $1,300 price target on the Elon Musk-led company’s shares.

The Tesla Thesis: Jonas said he expects more rival automakers to go directly to the mining companies to secure more of their critical materials. 

“Will Tesla get into mining? Depends who you ask..but we’d watch Tesla’s moves regarding securing supply of critical battery materials as an indicator for where the rest of the industry is going,” Jonas said.

“Tesla is playing Quidditch. Everyone else is playing hockey.”

See Also: Is Tesla Buying A Lithium Mining Company? What Elon Musk Has To Say

Tesla And Mining: Tesla could very well buy a mining company to fuel its needs for lithium and other raw materials for rechargeable batteries, Musk said on Tuesday.

The EV maker has so been signing multiple deals to lock its long-term deals for lithium, nickel, and other key materials — including an agreement with Australia's Core Lithium to supply 110,000 tonnes of lithium concentrate over four years.

Tesla was the first EV maker over a month ago to raise prices in the U.S. and China amid inflationary pressure and growing demand. 

Musk had then said Tesla might want to get into mining and refining directly. 

See Also: Tesla Getting Into Lithium Mining Is True 'Vertical Integration,' Says Gene Munster

The US Department of Energy said earlier this month that it would spend more than $3 billion to fund EV battery making.

Price Action: Tesla shares closed 1.6% higher at $800 on Tuesday.

Photo courtesy: Tesla

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