What happened
With a market capitalization near $900 billion, and annual sales approaching $54 billion, Tesla (TSLA 4.96%) -- once just an electric car start-up -- has grown into a force to be reckoned with in the automotive world, and after 10 straight quarters of healthy, and growing profits, no longer a bankruptcy risk at all.
But here's a prediction I'll bet you didn't see coming: Within just five short years, Tesla could be a bigger car company than Ford Motor Company and General Motors -- combined.
That prediction, by Morgan Stanley, is the reason Tesla stock is up 3.7% as of 1 p.m. ET today.
Image source: Getty Images.
So what
TheFly.com has the details: Once-tiny Tesla has grown to a point where it now controls 4% of the entire U.S. market for automobiles, and Morgan Stanley predicts that the company will "conservatively" retain at least a 3.5% market share through the end of this year -- and probably more than that.
With Tesla growing sales as fast as 63% year over year in January, Morgan Stanley believes Tesla could command a 10% market share by 2026, and grow to control 18% of the U.S. car market by 2030. Along the way, Morgan Stanley predicts that Tesla will surpass the combined revenue of both Ford and General Motors by 2027.
Now what
Morgan Stanley realizes this is a bold prediction. It acknowledges that most investors "still struggle" to accept the possibility that Tesla -- still less than 20 years young -- will ever outgrow Ford and General Motors, both of which have more than a century of growth under their belts. But as the banker sees things playing out, the bigger Tesla grows, the more market share it will be taking away from Ford and GM -- and thus the more their market shares will shrink.
As a result, the target Tesla's aiming to hit -- more sales than Ford and GM, combined -- is actually a moving target. Specifically, it's moving closer every day, as Ford and GM shrink in importance. In a car market that isn't growing all that much overall, this means Tesla is playing a "zero-sum game" against Ford and GM.
And today at least, Tesla is winning that game.
