Morgan Stanley's Adam Jonas Expands Coverage to Robot Economy: $9 Trillion eVTOL and 1 Billion Humanoid Projections by 2050

The Wall Street Journal profile of Adam Jonas represents a watershed moment in equity research coverage, marking the formal recognition of the “robot economy” as a distinct investment theme warranting specialized analyst attention [1]. Jonas, who served as Morgan Stanley’s lead autos analyst for over a decade establishing himself as one of the most influential voices on Tesla, has transitioned to the role of “Global Embodied AI/Robotics” strategist. This repositioning comes at a critical inflection point where traditional automotive boundaries are dissolving in convergence with artificial intelligence, robotics, and autonomous systems. Andrew Percoco has assumed primary Tesla coverage, allowing Jonas to pursue what Morgan Stanley views as the next frontier of capital allocation opportunity spanning humanoid robotics, autonomous ride-hail services, and urban air mobility.

The expanded coverage framework encompasses four interconnected domains: humanoid robotics and physical AI systems, autonomous vehicles and robotaxi services, eVTOL aircraft for urban air mobility, and industrial enterprise robotics. This holistic approach reflects Morgan Stanley’s conviction that embodied AI represents the complementary and potentially more transformative dimension to software-focused artificial intelligence, creating entirely new total addressable markets that could justify current AI-driven valuations across the technology sector.

Morgan Stanley’s research has articulated ambitious market size projections that underscore the investment thesis’s magnitude [5][6][7]. The eVTOL and urban air mobility sector is projected to reach $1 trillion by 2040, expanding to $9 trillion by 2050, representing one of the largest capital allocation opportunities spanning the next two decades. Perhaps more striking is the projection of 1 billion humanoid robots deployed globally by 2040, a figure that would fundamentally transform industrial productivity, labor dynamics, and consumer applications.

The equal-weighted Humanoid 100 index has demonstrated strong performance, rising approximately 25% since February 2025 and significantly outperforming major equity benchmarks [4]. This institutional capital flow into robotics-related equities validates Morgan Stanley’s strategic repositioning and suggests sustained investor appetite for the theme despite broader market volatility. The Technology sector demonstrated positive momentum on January 23, 2026, trading up 0.77%, with robotics and autonomous mobility names contributing meaningfully to this advance [0].

The robotaxi sector is experiencing intensifying competition with distinct strategic approaches from leading participants [8][9][10]. Waymo, operating under Alphabet, currently operates fully autonomous ride-hail services across Phoenix, San Francisco, Los Angeles, Austin, and Atlanta, maintaining approximately 2,500 vehicles in its fleet. Notably, Waymo recently expanded its Austin geofence by over 50%, increasing operational area from 90 to 140 square miles, demonstrating aggressive geographic scaling. Industry observers consider Waymo furthest along in true driverless deployment, with no safety driver present in vehicles for a substantial portion of rides.

Tesla’s approach, under Morgan Stanley’s coverage framework, differs substantially in methodology and timeline [9][11]. The firm projects 1,000 robotaxis on the road by year-end 2026, with Tesla recently removing safety drivers from portions of Austin operations. Tesla’s vision-only autonomous driving approach has been highlighted as a major AI milestone, leveraging what Morgan Stanley identifies as the company’s near-monopolistic advantage in diverse, real-world driving data that creates competitive moats for autonomous development [17]. The transition of Full Self-Driving to a subscription model at $99 per month, eliminating the $8,000 outright purchase option, signals Tesla’s confidence in the recurring revenue model’s viability as capabilities improve [13][15].

The humanoid robotics landscape presents both extraordinary opportunity and significant execution risk [4]. Tesla’s Optimus program represents a key catalyst, with potential Gen 3 unveiling expected in 2026. China has emerged as a major competitive force, with over 150 companies now active in humanoid robotics despite limited proven commercial use cases. This proliferation has prompted Morgan Stanley analysts to warn of a likely “shakeout” in the sector, cautioning that differentiation between winners and laggards remains challenging for investors.

Morgan Stanley’s research emphasizes a critical distinction between demonstrations and scalable deployment that warrants investor attention: “Humanoid autonomy remains extremely difficult and most demonstrations should be viewed with caution.” The firm’s guidance is explicit: “If a humanoid demo is not explicitly advertised as autonomous—one should assume it’s tele-ops” [4]. This measured stance suggests that while investment interest has propelled valuations higher, fundamental technical challenges remain significant barriers to mass adoption across enterprise and consumer applications.

The urban air mobility sector has gained substantial institutional attention as certification timelines approach [6][14]. Joby Aviation and Archer Aviation represent leading participants in Morgan Stanley’s coverage universe, with the firm recently upgrading price objectives for Joby. The $9 trillion market projection by 2050 reflects the transformative potential of electric air taxi services, though regulatory certification and infrastructure development represent meaningful near-term constraints.

Policy developments are accelerating the sector’s trajectory, with potential Trump administration executive orders expected to accelerate domestic robotics development [4]. This policy support could provide meaningful tailwinds for U.S.-based participants in the robot economy, potentially reshaping competitive dynamics with Chinese manufacturers who currently benefit from manufacturing scale advantages.

Recent developments highlight Tesla’s deepening focus on autonomy as a strategic priority [11][13][16]. The elimination of the FSD purchase option represents a strategic push toward subscription revenue, with Elon Musk indicating prices will rise as capabilities improve—signaling confidence in the technology roadmap. However, regulatory uncertainty persists in China, where state media has contradicted Musk’s claim that FSD approval was imminent, reporting that his projection of approval “next month” is “not true” [16].

This regulatory complexity underscores the challenges facing autonomous driving deployment across different jurisdictions, with China representing both a massive market opportunity and a challenging regulatory environment for foreign technology companies.

Jonas’s career pivot represents more than a personnel change—it signals a structural shift in how investment analysts conceptualize the mobility and technology landscape. The traditional boundaries between automotive, technology, and industrial sectors are dissolving as embodied AI becomes the unifying analytical framework. This evolution reflects Morgan Stanley’s conviction that the next trillion-dollar investment opportunities will emerge at the intersection of artificial intelligence and physical systems, requiring new analytical frameworks and coverage structures.

Morgan Stanley’s research has emphasized that companies are actively seeking new total addressable markets to justify AI-driven valuations, increasingly looking toward physical AI and humanoids as the next frontier [4]. This “embodied AI” thesis positions traditional software-focused AI as only half the equation, with physical embodiment representing the complementary dimension that enables interaction with the real world. The strategic implications for companies across automotive, technology, and industrial sectors are profound, requiring reassessment of competitive positioning and partnership strategies.

The policy environment is emerging as a determinative factor in competitive outcomes [4]. China’s “embodied intelligence” priority in the 15th Five-Year Plan reflects state-level commitment to the sector, while potential U.S. executive orders could accelerate domestic development. These policy dynamics create asymmetric opportunities and risks for market participants, with regulatory frameworks likely to determine market access, liability exposure, and competitive positioning across multiple jurisdictions.

The gap between impressive demonstrations and commercially scalable, useful deployment remains the sector’s most significant risk factor [4]. Morgan Stanley’s explicit caution regarding tele-operated demos versus true autonomy should temper investor enthusiasm for companies lacking verifiable performance metrics. The projected market sizes—$9 trillion for eVTOL by 2050, 1 billion humanoid robots by 2040—are contingent on overcoming substantial technical, regulatory, and adoption challenges that remain unresolved.

The likelihood of industry consolidation, particularly in the humanoid robotics space where over 150 Chinese companies operate, creates execution risk for investors betting on specific participants. Morgan Stanley’s warning of a “shakeout” suggests that not all current market participants will survive, requiring careful selectivity in portfolio construction.

For investors with appropriate time horizons, the robot economy presents extraordinary opportunity if technical and regulatory milestones are achieved. Tesla’s data advantage in autonomous driving, Waymo’s operational scale in robotaxi services, and the certification progress of eVTOL manufacturers each represent distinct paths to capturing value in this emerging sector. The policy support expected from multiple jurisdictions could accelerate development timelines and reduce capital constraints for leading participants.

The transition of autonomous driving technology toward subscription models creates recurring revenue opportunities with higher margins than traditional automotive sales, potentially transforming the economics of mobility companies that successfully execute on the technology roadmap.

The robot economy has graduated from speculative theme to institutional investment thesis, with Morgan Stanley’s coverage expansion validating the theme’s investment merit. The sector encompasses autonomous vehicles (Waymo leading in operational scale, Tesla projecting 1,000 robotaxis by end-2026), humanoid robotics (1 billion units projected by 2040, but capability gaps persist), and eVTOL/air taxi services ($9 trillion projected by 2050). Competition is intensifying across all segments, with Chinese manufacturers representing a meaningful competitive threat in humanoid robotics. Technical challenges between demonstration and scalable deployment remain substantial, suggesting likely consolidation among weaker participants. Policy developments in both the U.S. and China will significantly influence competitive outcomes and development timelines.