Tesla Inc. (TSLA) might struggle on its own and should consider partnering up with SpaceX, according to Morgan Stanley.

In a research note, analyst Adam Jonas said tighter collaboration between the two companies, both co-founded and led by Elon Musk, would help Tesla to better handle growing competition from its wealthier peers and fund its expensive investment projects.

Jonas expects Tesla to face stiff competition in the automotive industry over the coming years. He said the company risks being overtaken by larger players in the sector with "arguably superior access to capital, talent and business models that can monetize vehicle data and content opportunities," reported CNBC. The analyst doesn’t expect Tesla to attract suitors, because of its capital-intensive nature and other economic and political factors. (See also: GM Could Beat Tesla in Autonomous Cars: Barclays.)

For this reason, he views a partnership with SpaceX as a viable solution. A tighter relationship with the profitable rocket maker, he claimed, could provide greater access to much needed funds, as well as the ability to share other useful resources.

The analyst noted that SpaceX enjoys a dominant position with its launch business and is poised to enter other highly profitable markets. He estimated that it is a $46 billion company, more than twice the valuation it raised money at recently, reported Bloomberg. (See also: Latest Investment Gives SpaceX $21B Valuation.)

Jonas also believes that a tie-up with SpaceX could ensure that Musk continues running the electric car maker on a day-to-day basis. “Investors widely expect Elon Musk to, over time, devote increasing amounts of his time and talents to SpaceX, raising the very real question of who could replace him at Tesla,” Jonas said, according to Bloomberg. “A combination of efforts between the two firms could address this important issue.”


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