Morgan Stanley analysts conducted a study of the link between Starlink and Tesla's autonomous vehicles and concluded that satellite communications for autonomous vehicles and beyond would become a very important component in the future. The firm predicts that more auto OEMs and mobility players will explore collaboration/pilot programs in the area of LEO satellite communication in the near to medium term.
Morgan Stanley analyst Adam Jonas wrote that the firm has long seen the link between LEO satellite communications and next-generation transport networks. During the Q4 2019 conference call, the analyst asked Tesla and SpaceX CEO Elon Musk about the potential commercial/technological overlap between Tesla and Starlink for communication. Jonas wanted to know if Musk sees the potential for Tesla vehicles to be fitted with user terminals that are compatible with the Starlink constellation in the near- or medium-term future.
Musk responded that this could definitely happen in the coming years. He explained that Starlink focuses on high-bandwidth, low-latency connectivity for homes and businesses, and possibly aircraft and boats, and that kind of thing. Technically, Tesla car owners can buy Starlink, install it in the car, and it will work.
Morgan Stanley on Tesla Autonomous Cars and Starlink:
1. Autonomous cars may require sat comms for enhanced capability. Cars may frequently travel outside of dense areas served by terrestrial 5G.
2. Autonomous networks may require sat comms for 'triple-redundant' safety and security. In the event a reliable communications network with a terrestrial system is unavailable/compromised, sat comms can serve as a capable back-up for connectivity and navigation.
3. For eVTOL/UAM, enhanced sat comms may be a technological necessity. And for space-based transportation networks, sat comms is likely a pre-requisite. It is Morgan Stanley's understanding that current terrestrial 5G networks are not designed to communicate with vehicles moving at heights above several hundred or several thousand feet. A secure downlink may be required for the safe navigation and path planning of eVTOL networks. For the point-to-point (P2P) space transport market, satellite-based communications may be the only viable option.
4. Falling antenna cost improves the economic rationale/payback period of sat comms for new mobility 'clients.' In Morgan Stanley's Starlink model, the firm forecast the average cost of a user terminal to fall to approximately $500 by 2025, $200 by 2030 and $100 by 2040. While there is great debate in the market about the pace of deflation of satellite broadband user terminals, they note that autonomous cars and aircraft will be highly utilized and highly revenue-generating devices.
5. The number of autonomous cars and autonomous aircraft (including eVTOL and UAM vehicles) may ultimately exceed the 1.2 billion cars on earth today. This is relevant as the total addressable market (TAM) for Starlink may extend far beyond households in remote/underserved parts of the world.
H/T Sawyer Merritt/Twitter
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