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How Tesla Goes to $320

Updated from 12:53 p.m. to include information about the battery in the fourteenth paragraph.

NEW YORK (TheStreet) -- Though the electric vehicle market is just starting to become mainstream, Tesla Motors (TSLA - Get Report) is the most well known of the group. However, according to Morgan Stanley, Tesla is going to be much more than just a top electric vehicle maker -- it's planning on changing the world.

Morgan Stanley analyst Adam Jonas put a $320 price target on the company's shares, saying he believes that Tesla will have 0.9% of the global car market by 2028, certainly an ambitious goal.

"Tesla is an extremely ambitious company for whom flooding the market with fun-to-drive EVs and giving competitors a headache might not be the endgame," Jonas wrote in the report. "Tesla's limited addressable market, a long-time bear thesis on the stock, appears well up for grabs here."

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Shares of Tesla were soaring in early Tuesday trading, gaining 15.3% to $250.88.

TSLA ChartTSLA data by YCharts

In 2013, Tesla delivered just over 20,000 Model S units, and expects to deliver 35,000 units in 2014. In comparison, the U.S. new car and truck market for 2013 was approximately 15.6 million units, and analysts expect that to jump over 16 million in 2014, as the global economy continues to recover.

Jonas notes that the global auto industry is much bigger than that, with over 100 million annual unit sales, and $2 trillion in revenue by 2020.

That 35,000 number may come in 2014, as Model X advertisting increases and consumers become more aware of it. On Tesla's fourth-quarter earnings call, CEO Elon Musk noted he believes the X will be bigger than the S. "[I]n relative terms, it appears that the X will see at least as much a demand as the S," he said. "And if I was to guess, and this is just a guess, I think the X demand may exceed the S demand. I mean, this is very speculative, so don't hold me to it, but that's my best guess. I think X demand will exceed S demand."

That's a pretty heady statement, considering all of the accolades and awards the Model S has won. Consumer Reports just named the Model S its top car of 2014, noting it has "blistering acceleration, razor-sharp handling, compliant ride, and versatile cabin, which can fit a small third-row seat."

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