Major new Tesla product line –Â not a car –Â will be unveiled at our Hawthorne Design Studio on Thursday, April 30, 8 p.m. –Elon Musk (@elonmusk) March 30, 2015
This simple tweet by Elon Musk, the enterprising CEO of Electric Powerhouse Tesla Motors (TSLA, Financial) injected a zing of energy in the automotive world. The power of these few well-placed words was extraordinary evident by an almost 4% spike in Tesla’s 5.48% stock within minutes of the tweet. The single tweet of 115 characters, light on details, instigated such hype and anticipation that the company’s market cap increased by a staggering $900 million.
The new product line
The new offering is expected to be the home and business batteries packs. The California-based company has enhanced its repute as an out of the box thinking enterprise by diversifying into the innovative electric battery segment. It is said that Tesla has already installed more than 100 projects in its trial run without much hype. 11 stores of the retail giant Walmart (WMT, Financial) in the United States and around 300 California homes are already part of the testing program. An arrangement with the Food processing giant Cargill is also being worked out. Educational institutions and other commercial setups are also potential candidates for this new technology. Jeff Evanson, Tesla’s VP of investor relations, confirmed in an announcement saying “We have decided to share a bit about what we will announce on the 30th. We will introduce the Tesla home battery and a very large utility scale battery. We will explain the advantages of our solutions and why past battery options were not compelling.”
The energy storage business
The upcoming launch of a non-automotive line did not surprise many as Elon Musk is already the chairman for California-based solar company Solar City (SCTY, Financial) which offers solar power solutions for homes. The Tesla batteries could be an extension to this and are said to be predominantly powered by renewable energy sources like wind and solar. In 2014, Tesla Motors revealed extensive plans for a "Gigafactory" for advancing the production of batteries for its electric cars, and now homes. The factory is expected to cut costs by 30%.
Rival car manufacturer, Toyota (TM, Financial), also employs an indigenous hydrogen fuel cell in its Mirai cars that can be removed and used to power a home. The Japanese innovator claims that its battery can supply electric power to an average home for a week. According to Andrea James, an analyst with Dougherty & Co, Tesla’s energy storage business could pump up the company’s stock value by as much as $70 per share. The big hype on energy storage is primarily due to an anticipated 11% market growth in this segment from 2014 to a value of $1.5 billion in 2019.
Investment in energy conserving batteries will result in attractive SGIP rebates, stock boosts (estimated to be up to $70 ) and will handsomely complement the solar batteries of Tesla’s sister company Solar City leading to expansion and growth of both companies.
Future
The low-cost, energy conserving alternative presented by Tesla’s home batteries have already been declared as a serious game changer for the clean energy industry. Tesla motors have already revolutionised the electric car market. Will it change the face of the utility and energy sector as well? We may get some answers on April 30, 2015.
