Tesla's Success Is a Matter of US National Security

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The energy independence of countries has become a critical issue after Russia attacked Ukraine. In this vein, Tesla, which has been transforming the world for nearly 20 years by developing EVs and its energy business, is becoming an extremely important competitive advantage for the US. Now the successful development of Tesla is a matter of US National Security.

Analyst Morgan Stanley Adam Jonas has released a new note, which he called “Tesla, Batteries and US National Security,” emphasizing that the manufacturer is an important link in US national security. The firm noted that on Wednesday there were events that are important in the world of batteries and electric vehicles. Jonas believes that investors should pay attention to this.

According to Bloomberg, the Biden administration may be poised to invoke the Defense Production Act to encourage domestic production of key materials for EV batteries (the White House has not confirmed). This highlights that the fossil fuel economy is now in a precarious position due to the fact that the necessary reserves are located in geographically remote and geopolitically/environmentally unsafe markets.

“The renewable economy currently relies on insufficient quantities of atoms and molecules from distant and geopolitically insecure markets to store the required BTUs from the grid. National Security Resource Nationalism is likely with us to stay.”

Jonas believes that in order to truly build renewable energy generation and transport infrastructure, the US will need batteries in two places:

1. Everywhere electricity is generated
2. Everywhere there are things that move

According to the firm, Tesla is a very important link in this vein. Jonas wrote:

“We're not going to tell you that Tesla is a car company. Or a tech company. It's both. But it's also an energy company. And what we're seeing emerge over the course of this year is Tesla as a renewable energy on-shore infrastructure company. We believe Tesla's role in constructing the EV supply chain (upstream) and EV infrastructure (downstream) will become increasingly evident to the investment community over the next few weeks/months.”

In the wake of Russia's attack on Ukraine, the issue of access to energy resources has become acute around the world and now it has become a matter of national security, which was loudly noticed by Tesla CEO Elon Musk a few weeks ago. Jonas wrote that “Energy Security = National Security. Recent geopolitical events may have accelerated the nation's 'sponsorship' for on-shoring mission critical battery materials and advanced battery technology to control our own destiny in renewable energy and transportation.”

The firm expects grid-level stationary storage to receive significantly more attention over time due to its role in enabling renewable generation, and greatly reducing the dependence of electricity generation on fossil fuels. While Tesla is the obvious solution to this, Morgan Stanley is also looking at FREY as the closest to a “clean game” share in the production of renewable batteries for stationary storage, with a focus on Europe.

© 2022, Eva Fox | Tesmanian. All rights reserved.

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