Tesla Motors Inc (NASDAQ:TSLA) usually makes headlines for its electric cars or its planned gigafactory, but DoubleLine Capital CEO Jeffrey Gundlach sees a more important reason to like the automaker. Speaking in an interview with CNBC, Gundlach said he especially likes Tesla because he thinks the company’s batteries might “change society,” particularly when paired with solar power.
Tesla plus solar power
The bond expert spoke on CNBC’s Squawk Alley, saying, “It’s all about the batteries.” He believes that Tesla could “ultimately change society” with its battery technology. Gundlach echoed comments made by others for quite a while, saying that Tesla’s batteries could become very important in terms of energy storage. He made similar comments back in July as well.
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Tesla CEO Elon Musk is also chairman of SolarCity Corp (NASDAQ:SCTY), and Gundach believes that by combining Tesla’s batteries with solar power, homes could be taken off the grid. He said all it would take is a solar power system that collects energy from the sun and then stores it for use at night or on cloudy days in one of Tesla’s battery systems.
“I think they can ultimately change society if they pursue battery technology that really creates the ability to store enough energy that you could, say, run a house on, get yourself off the grid,” the bond expert and DoubleLine Capital chief told CNBC.
Tesla’s batteries are more important than its cars
While Gundlach likes Tesla, he avoided the topic of its stock. He emphasized that the reason he likes the company is because of its battery technology. Tesla shares have been highly volatile in the last couple of years as investors weigh the company’s future and its potential for success in mass market vehicles.
Tesla has been focusing on building its gigafactory for the purpose of significantly improving supply for the lithium ion batteries it uses in its battery packs. Without a greatly improved supply of batteries, the automaker’s plans for its Model 3 mass market vehicle won’t work. The company already faces supply constraints on its Model S sedan, as management continues to say that demand for the car outstrips supply.