$6 diesel should benefit Tesla's trucking ambitions, Morgan Stanley says
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Surging diesel prices in the U.S. could strengthen the case for Tesla's semi truck, according to Morgan Stanley analysts. Diesel rose above $6 a gallon for the first time ever on Friday, more than 60% above the same period last year, according to data from AAA. Fuel costs are surging as the Iran and Ukraine wars knock out a large amount of global refining capacity. "$6 Diesel...Enter Tesla Semi," Morgan Stanley analyst Andrew Percoco told clients in a Friday note. Tesla has started production on its electric semi and plans to "get self-driving working" on the vehicle early in 2027, CEO Elon Musk told analysts on the company's July earnings call. An autonomous electric semi truck would slash costs by 20% per mile compared to a human operated diesel vehicle, according to Morgan Stanley's analysis, and more than double the miles that each truck drives annually to more than 215,000 miles, or 133% above current levels . Annual profit per truck excluding overhead would surge more than 400% to about $202,000 compared to nearly $37,000 for a human-operated diesel vehicle, according to the investment bank's analysis. Tesla could generate about $12,000 to $18,000 a month per truck from autonomous driving software, Percoco said. Tesla Semis will remain a "very small percentage" of the company's total vehicle fleet through the end of this year, Musk acknowledged in July. Morgan Stanley maintains an equal-weight investment rating on Tesla, with a share price target of $400, implying 10% upside over the next year compared to Thursday's close of $363.56.