The Biden administration's plan for the electric vehicle sector will increase Tesla's (NASDAQ: TSLA) lead over old players and new entrants in general. Therefore, automotive investors face a greater risk of not owning Tesla shares in their portfolio, says Morgan Stanley.

Morgan Stanley analysts believe Tesla is the company that will benefit the most from President Joe Biden's plan to develop the electric vehicle (EV) sector. Biden's $2 trillion infrastructure proposal envisions $174 billion for the EV sector as the president seeks to make American companies the leaders in the area and surpass China, which is currently the leader.

In a note released on April 7, Morgan Stanley analysts said the bill would increase Tesla's advantage over old manufacturers and new entrants in general. The new policy will slow down sales of internal combustion engine (ICE) vehicles and boost sales of EVs. Tesla will have such a great advantage because it produces exclusively EVs. However, analysts believe that it is worth considering that the process of implementing incentives can be complicated by some laws.

"It will likely be complicated by a labyrinth of national and local laws that will present advantages and disadvantages to various automakers, depending on the year that you choose to analyze."

Putting the data together, Morgan Stanley believes that if auto investors do not own Tesla shares, then they face greater risks than if they own them.

"Put it all together and we believe auto investors face greater risk not owning Tesla shares in their portfolio than owning Tesla shares."

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Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.