A prominent analyst at Morgan Stanley said recently that Tesla Inc. (TSLA) - Get Report will need to quickly develop its Tesla Network and not rely solely on car sales if it is to reach a point where the market would value it as it does Apple Inc.

Adam Jonas told clients that "Elon Musk himself has been outspoken about his belief that the company could, one day, be worth more than Apple Inc. (AAPL) - Get Report . Could a highly successful Model 3 and its progeny achieve this? In our view, no. In our view, there's only one market big enough to propel the stock's value to the levels of Elon Musk's aspirations: that of miles, data, and content. When does Tesla make the leap to mobility? It's been more than a year since Mr. Musk first alluded to Tesla Network and we've heard very little on the topic since that time. In our view, this quiet period probably cannot last much longer."

The analyst has a base price target of $305 on Tesla shares, but he also provides bullish and bearish scenarios in which he projects the shares could trade as low as $175 or as high as $511.

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He said he's shifted his bearish case valuation from one of asset liquidation/replacement value to one of strategic value. "The level of strategic interest in the transportation sector has even taken us by surprise. Any number of firms (and funds/consortiums) across the tech stack have been making big moves to get closer to the 10 trillion miles traveled annually by the global car population."

"Our $511 bull case for Tesla is unchanged and is based on both higher market assumptions for the core automotive business and more aggressive assumptions for Tesla Mobility (Tesla Network)," he said.

Jonas said his $305 price target attributes a $233 a share DCF value of the core Tesla Auto business and Tesla Mobility $72 per share. "Our price target applies zero value for Tesla Energy and zero value for Solar Citi" the solar power firm Tesla recently absorbed.

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Editor's Pick: Originally published Jun. 12.