100GW, far exceeding the ground demand in the United States! The solar power capacity that Tesla is expanding is preparing for space data centers

After Tesla proposed the idea of "adding 100GW of solar manufacturing capacity," what the market is most concerned about is not whether it will engage in the component business, but rather what role this plays in Tesla's long-term vision. Morgan Stanley's research points to two key terms: supply chain and data centers—especially the "space data centers."

On February 11, according to news from the Wind Trading Desk, Morgan Stanley analyst Andrew S Percoco pointed out in a recently released research report that the core driving force behind Tesla's vertical integration of the photovoltaic supply chain is not to sell panels on Earth, but to serve the grand vision of "space data centers."

The firm stated that in the context of increasing geopolitical risks, ensuring the supply chain security of this critical energy segment could not only bring about a valuation increase of approximately 35% for Tesla Energy but is also a necessary means to connect Starlink with a closed loop of space computing power.

The report also specifically noted that this strategy is not without cost. To achieve full industry chain coverage from raw materials to components, Tesla needs to invest a massive capital expenditure of $30 billion to $70 billion, but this amount is not included in its guidance of over $20 billion in capital expenditures for 2026.

Morgan Stanley believes that this significant expected gap is becoming a key variable in re-evaluating Tesla's energy landscape valuation.

The intention behind the drunken man is not the wine, but the space data center and supply chain security

According to the report, from a basic supply and demand perspective, Tesla's entry into photovoltaic manufacturing at this time makes no logical sense.

Currently, global photovoltaic component capacity exceeds demand by nearly 40%. Even in the U.S. market, which is protected by trade barriers, the annual demand for utility-scale photovoltaics is only about 30-40GW. If Tesla's planned 100GW capacity is fully released into the market, it will face fierce price competition.

However, Morgan Stanley's report reveals a key misalignment of various application scenarios: the vast majority of this 100GW capacity will be used for "space data centers," rather than ground power stations.

Morgan Stanley stated that as AI computing power extends into orbit, the energy supply for space data centers has become a bottleneck. Musk repeatedly emphasized the threat of geopolitical risks to critical supply chains during the conference call, suggesting that Tesla is unwilling to be constrained in the core energy segment.

Tesla's choice of vertical integration is to build an independent and controllable energy closed loop to support its long-term goal of sending a large number of data centers into space. In short, this is a "security premium" to establish strategic autonomy.

Hidden bills and trillion-dollar revenue potential

What the capital market is most concerned about is how this calculation works. According to Morgan Stanley's estimates, the scale of Tesla's investment will depend on the depth of integration:

• Full industry chain integration (from silicon materials, silicon wafers to batteries and components): Capital expenditure could reach $30 billion to $70 billion.
• Only battery manufacturing: Capital expenditure could be reduced to $15 billion to $20 billion. Although the initial investment is huge, once the 100GW capacity is fully operational, the cash flow effect generated will also be astonishing

Assuming the average selling price of components is $0.25 per watt, this alone could bring Tesla an annual revenue of $25 billion. In comparison, Tesla's existing energy storage business (ESS) is expected to generate about $13 billion in revenue by 2025.

This means the photovoltaic business is expected to recreate the revenue scale of two energy storage segments.

On the profit side, a mature vertical integration model is expected to push gross margins up to 20-25%. After deducting operating expenses, it is estimated to contribute an additional $3 billion to $4 billion in EBIT (earnings before interest and taxes) for Tesla's energy business.

IRA Act: An Arbitrage Opportunity Not to Be Ignored

The research report points out that apart from strategic value, the substantial subsidies provided by the U.S. Inflation Reduction Act (IRA) are another pillar supporting this business model.

The tax credits (45X Tax Credits) vary significantly across different manufacturing stages:

If Tesla achieves local manufacturing across the entire supply chain, it can receive a subsidy of $0.17 per watt. At full production of 100GW, this means an annual pure profit gain of $17 billion.

If only engaged in battery manufacturing, the subsidy is about $0.04 per watt, with an annual subsidy amount of about $4 billion.

Morgan Stanley stated that this policy arbitrage opportunity provides a safety net for Tesla's high capital expenditures. Even if the sales profit of photovoltaic products themselves is thin, the substantial tax credits can ensure the project's return on investment.

Valuation Reconstruction: The Last Piece of the Energy Business Puzzle

Under this logic, Morgan Stanley has revised its valuation model for Tesla's energy business.

Currently, the independent valuation given to Tesla's energy business is $140 billion (approximately $40 per share), while the photovoltaic manufacturing business is expected to add an additional $25 billion to $50 billion in equity value (approximately $6 to $14 per share) on top of this.

The research report notes that although this incremental value is not large relative to Tesla's overall market value, its strategic significance lies in eliminating the "barrel effect."

Morgan Stanley stated that without its own photovoltaic supply capability, Tesla's expansion in energy storage, space exploration, and AI computing power will ultimately face energy bottlenecks.

This investment is essentially a high-value "insurance" for Tesla's future interstellar business, ensuring that it will not be choked by a small solar panel in this round of competition in physical AI and space infrastructure