Jonas unveiled his thesis in a note to clients last week, and said that customer preference suggests that level of safety will be a major driver of sales.
"We think the Model 3 will feature hardware and software that provide a level of active safety that could significantly lead all other cars on sale today and could, if the company achieves its goal, be an order of magnitude (i.e. 10x) safer than the average car on the road," Jonas wrote in a note Thursday. "According to nearly every OEM we talk to, safety is the number 1 determinant of car purchases. Look for safety to be the 'ah-hah!' moment for this car due to launch this year."
His argument relies on the technical potential of Tesla's Autopilot system and the company's ability to collect extensive driving data from customers.
In fact, Jonas thinks the big jump in safety technology could even strike a blow to the used car market — perhaps sending used car values down by as much as 50 percent in five years.
"Tesla's cars can get better because they can learn. They put in that equipment so that the vehicle five years from now is much more superhuman and much better than the one that is just learning and watching right now," he said.
The safety of Tesla's cars has come under scrutiny recently after a number of high-profile crashes, including a fatal accident in May 2016 that occurred while Autopilot was engaged.
— CNBC's Robert Ferris contributed to this report.
Disclosures: Morgan Stanley owns shares of Tesla. Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of Tesla Motors Inc. Within the last 12 months, Morgan Stanley has provided/is providing non-investment banking services to or has a client relationship with Tesla.
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