Tesla Motors Inc (TSLA) Climbs After Battery Report

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Tesla Motors Inc (TSLA) Climbs After Battery Report

Tesla Motors promised to release a new product that isn’t a vehicle on April 30, and that product is expected to be a battery, but not just any battery. It’s expected that there will be a battery to power homes and another huge utility-scale battery announced.

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Tesla Motors Inc (TSLA) Climbs After Battery Report

Tesla’s battery worth $100/share?

Deutsche Bank analysts see significant market potential in Tesla Motors Inc (NASDAQ:TSLA)’s battery plans, suggesting that the technology could add as much as $100 per share to the EV manufacturer’s market value. Analyst Rod Lache and his team stated in their latest report that they don’t think Wall Street is pricing in the battery into Tesla’s valuation yet.

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They said there simply isn’t enough information to price in the technology yet, but their “preliminary work on the economics of Stationary storage” suggests a value of $100 per share could be piled onto Tesla’s already-massive stock price. Further, they suggest that applications for the technology could end up making up a third of the output of Tesla’s gigafactory, making the business worth $4.5 billion per year at $300 per kWh. They said such a massive business could add up to $5 per share to their 2020 earnings per share estimate.

Shares of Tesla Motors Inc (NASDAQ:TSLA) surged as much as 6.46%, climbing to $232.53 per share after the bullish report from Deutsche Bank.

Tesla could adopt SolarCity-like model for batteries

Tesla Motors Inc (NASDAQ:TSLA) has already been working with SolarCity for some time on a pilot program under which 11 Wal-Mart stores and 300 homes equipped with solar panels have the batteries installed. The Deutsche Bank team pointed out that the partnership with SolarCity is a broad opportunity. SolarCity targets 1 million customers by the middle of 2018 compared to 190,000 customers now. Tesla could see $800 million in revenue just from equipping half of SolarCity’s customers with 6 kWh worth of battery systems.

Benjamin Preston of The Guardian reports that Tesla Motors Inc (NASDAQ:TSLA) could take more than a partnership away from the project with SolarCity. He spoke with analyst Trip Chowdhry, who said he met some of the customers who have the Tesla systems installed. He said currently the system comes in 10 or 15 kWh configurations to solar customers who don’t have EVs or plug-in vehicles. The battery pack is priced at around $13,000, although Pacific Gas & Electric is offering a 50% rebate for using the system.

Customers interested in financing pay $1,500 up front and then $15 a month for ten years and then return the battery to SolarCity. This setup is similar to the leasing setup SolarCity does with its solar panel systems customers.

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79 COMMENTS

  1. Centralized production is cheaper because of economies of scale. However in the case of electrical energy the transmission and distribution (T&D) losses far outweigh that benefit. Wind (mostly rural) and Solar can produce energy literally in your backyard. Since you are producing at the point of consumption the T&D losses are minimized. This is exactly what a Smart Grid tries to do – manage demand and supply on the principle that when demand increases you try your best to source energy from the nearest source, (Things being equal in other respects such as type of plant, cost of production etc). This demand and supply problem comes up because electricity in MW-GW range cannot be stored.

  2. Yes it is. Producing mass energy in a big power plant is more efficient and cheaper. However in the case of electrical energy, much of those gains and more is lost in the transmission and distribution losses incurred when we transport to the retail customer. Add to that fact that currently Solar and Wind (rural locations) based electrical energy power plants are the only two forms of energy sources that you can literally have in your backyard it makes for a compelling case.

  3. Yes it is. For example the cost per KWH of energy production trends lower as the power plant size goes up. However transmission and distribution losses are much higher when you transport this energy over cables to the end consumer. So having the generation closer to the consumption is ideal.

  4. First, there is no we; just you and your obtuse self.
    Second, both of the sources I gave are fully researched, UNBIASED certified sources. The data is fully objective.
    Thirdly, the “Q” stands for Quest. The Quest Kodiak is one of my favorite aircraft as I am an aircraft mechanic, student pilot, advanced tech, car, and EV enthusiast.

    This is my last response to you.

  5. what we need” Q-Kodiak” is an UNBIASED source—please provide a compendium of unbiased ,certified sources for your assertions…the “Q” must be for queeeeeer—?eh….

  6. I do not own any TSLA stock although I wish that I had bought when it was $30.

    The NHTSA and the NFPA are my sources. Just because its on the internet does not mean that it’s not true. What is your source? What your “friend” said?

  7. source please (not bogus internet garbage…). 1 out of 3 Tesla cars has had a small.medium or devastating fire—get out of the stock now—and you will thank me later…

  8. Musk is certainly no “visionary”—Tesla is a house of cards soon to burn up and possibly the most poorly engineered piece of junk on the planet—. again, get out of the stock now—you will thank me later…

  9. give us a true “source” please —not the “bogus” info off the internet…facts are facts —and u have none Joe—your incompetence is almost as bad as the CEO of Tesla…

  10. source please–(-consumer reports is NOT a source as it is biased in that every car manufacture pays a large stipend to the organization…). the facts are that 1out of three Tesla cars have reported a small,medium or devastating fire leading to death in several cases.— better go drink more of your “Kool-aid” little boy…

  11. Source please—all your “stat’s” are fictitious garbage made up —better go back to school (but don’t drive in a Tesla or you will burn up…)…

  12. He’s not a “hater”. He’s either a teenager or a complete moron. At any rate, he knows nothing about investing and even less about Tesla.

  13. I tried to attach the fire facts for you. ” In 2003-2007, U.S. fire departments responded to an average of 287,000 vehicle fires per year. These fires caused an average of 480 civilian deaths, 1,525 civilian injuries, and $1.3 billion in direct property damage annually. ” the result is an average 90 vehicle fires per billion miles driven. Tesla has had 3 fires per billion miles driven. Hence, my factless postulated statement, all cars are flammable.

  14. What facts do you need? The fact consumer reports ranked the tesla 99, and wrote it was the best car they’ve ever tested? consumer reports said they “only” ranked it 99, because charging stations would’ve made it a 110 out of 100. Or the fact tesla is also the only car to score perfect in both US and Euro safety standards? Kook aid is a drink commonly used by cults that believe in something greater than themselves. If you believe the kool aid is bad, go there and save them. Let me know how it goes, tweet some pics of your meet with consumer reports.

  15. What you will find is that The costs have finally broken even, where just 5 years ago GE analyzed it to be cost prohibitive before. As for working on an energized grid during an outage, that’s standard safety procedure. All projects today are performed on an energized grid, and we are trained to expect the grid can be energized at all times. Today, most regulatory authorities require service disconnects on residential supply if mains is offline. There is no reason this regulation would change. In supply orchestration, the outage would be sent as an emergency supply rerouting event. Today multiple power plants go offline and most people never notice, because the distribution lines are rerouting power immediately. If something happens at the local coal generator, the remote natural gas generator takes over immediately. This is possible for residential too, as long as the software handles it and integrates with the existing SCADA software.

  16. Hey Kris,

    Appreciate the discussion. The model S is a brilliant piece of engineering. The drag coefficient is among the lowest in production vehicles. The model S platform with the battery on the bottom results in a low center of gravity and the AWD motors means it rivals some of the fastest ICE cars on the market. The model X will be built on the same platform, and will naturally make it one of the most agile and fastest SUVs ever produced. As we all know, this is a hype stock, I predict that the model X will be a huge boost to stock value, as well as any third generation news. Tesla has consistently met all challenges and has a track record for success. Musk is a visionary, as long as he is around this stock will continue to be in sky high valuation. Like it or not, the man can execute.

  17. What planet are you from? Probably planet Factoid (look it up).

    The Tesla Model S is the safest car ever tested by the NHTSA. That is a FACT. Look it up. http://ir.teslamotors.com/releasedetail.cfm?releaseid=786136

    Their hasn’t been a fire since those first few which suspiciously all happened in rapid succession. Just a sidenote, over 150,000 gasoline car fires occur every year. That is also a FACT. Look it up.

    Sure it’s underpowered when compared to cars costing 10X as much. With 691 hp, the Tesla Model S P85D is the quickest production 4-door in the world. That is a FACT. Look it up.

    Breakdown ever 106 miles… I think you need to lay off the crack. One Model S owner recently passed 120,000 miles. According to you, he must have suffered 1,132 breakdowns. What’s funny is that he had exactly ZERO. That is a FACT. Look it up. Just think: 120,000 miles in 3 yrs with no problems… That’s a whole lot of driving!

  18. One cannot compare the valuation metrics or PEG growth of MCD or Apple (which is grossly over valued…) to ‘Tesla as Tesla has no earnings and huge debt ( a true house of cards…) as well your stats on “flammable ” cars is grossly incorrect—we studied these postulated valuation metrics during my PhD studies at Princeton and you have no leg to stand on here my uneducated child…I urge you to sell now and thank me later…

  19. every automobile is flammable. BEV’s are the least flammable of them. I think something on the order of 500+ per day ICE car fires, vs 5 per year of BEV’s. Flammable yes, completely different categories of flammable though.

  20. Micro grids cannot be implemented in established grid serviced communities without the need to install expensive secondary underground infrastructure. This is true because there is no way to work on the existing grid during an outage if it is energized by a storage based micro grid system.

    Installing a micro grid system in an established community will be similar to installing fiber optic in a community that currently uses cable, only it will be far more expensive when considering the cost of expensive Li-ion batteries, BMS/Cooling systems, battery containment structures, copper cabling, transformers, inverters, switch gear etc. So expensive, that it will render such utopian dreams impossible.

  21. Micro grids cannot be implemented in established grid serviced communities without the need to install expensive secondary underground infrastructure. This is true because there is no way to work on the existing grid during an outage if it is energized by a storage based micro grid system.

    Installing a micro grid system in an established community will be similar to installing fiber optic cables in a community that currently uses cable only it will be far more expensive. So expensive that it will render such dreams impossible.

  22. PG&E is probably less worried about solar threat directly, than it is worried about the grid costs they are not allowed to charge for due to regulation. I understand that if PG&E is forced to allow solar, they have to pay to upgrade their transformers and distribution wires, without being able to recover that from solar grid tie customers. That’s where the threat to their bottom line comes in from solar, not solar itself. Everyone knows that power distribution grid is where they make money, energy production itself never made that much money.

  23. I have a Solar City PPA, as the best option for my location in cloudy MD. If located in sunny CA, FL, TX or Hawaii I would’ve bought solar outright as the best option. The primary factor location, is the amount of sunlight vs cost. With the PPA, when it’s not producing power I’m paying the regular utility rate, lost nothing. When the sun is out, I pay 2 cents less than the utility (smaller gain than ownership but a gain). If I purchased the system, it wouldn’t pay back for at least 15 -20 years or more. Oh, and the minor PPA ‘they maintain it’ is worth more than the $ amount to me. Being able to call someone to do 100% of the maintenance is worth it for a second story roof. Solar City actually came out during the snow storm, got up on the ice covered roof, and cleaned the panels off. I would never do that if I owned the system.

  24. trading 10% energy loss from existing battery technology to store and avoid a 50% energy loss from waste heat is the gap where energy storage fits. Energy grids if you recall, must way over produce to satisfy peak demand, while burning off the unused energy in the form of big hair dryers at the substations. (Rarely do they use expensive fuel cells to recapture outside CA) If they don’t burn off the excess energy the grid destroys itself. Base load plants coal, nuclear, hydro, can’t adapt to demand changes very fast but they use cheaper fuel, causing the more expensive natural gas peaker plants to be built and fired up to adapt to peak demand. That peak generation vs demand spike now is greatly exaggerated by solar, wind, and intermittent power sources. Something has to normalize the grid power, or damage and outages result. Electric utilities mix all sources of power generation to meet demand, and negotiate the lowest overall cost of energy mix. Grid Tied Solar and wind are causing a huge cost problem, since they are wildly unpredictable sources, and can only be offset by the highest cost fuel, Natural gas at a rate of 10x.

    To my Software defined micro grid comment. Utilities currently use complex algorithms to determine how to meet demand with the cheapest negotiated mix of fuel sources to meet peak demand from macro energy generation sources. They today have some control over demand (street lights, thermostats, water heater cycle subscriptions, etc) little control over generation sources they don’t own (commercial backup diesel generators use phone calls from utility to people to engage when needed). Now there is a new problem with solar/wind, uncontrolled peak supply. One option is to send a signal to solar and wind to stop the inverters from sending too much energy back, which defeats the whole purpose of them. Batteries combined with grid tie solar and wind can now normalize the peak supply spikes, on demand by the energy utility. Something as small as a 5kw battery in a residence is enough to reduce up to 50kw of peaker energy build out need, due to the supply/demand/waste problem. The greatest need in the utility grid today is software for supply orchestration (batteries, onsite generators) in the same manner as they’ve done for demand orchestration. Today power companies will call commercial entities, like Retail stores, hospitals, and Data centers with megawatt generators, and ask them to run on expected peak power days. This is terribly inefficient and can’t be managed effectively on moderate days by hand. Imagine if the power company could offer a payback subscription to consumers. As a business owner, or residential customer, one could allow the battery or generator to be controlled remotely. The utility would be able to enable only power sources they need, instantly. Of course with the same customer subscription over rides allowed with existing energy savings thermostats, water heaters and cycle limits. The utility would be able to offer some fraction of the money they avoided spending, back to the consumer for their participation, same as they do on demand cycling programs. For example, you receive a flat rate for energy produced by solar, but the utility pays different prices every hour for theirs. With a battery you can get that flat rate, plus a bonus rate for giving it back off hours. When the utility would otherwise have to pay more for energy, they’ll give you part of what they saved. With software orchestration or supply cycling, billions can be recovered from the waste gap every month. This won’t work on the small scale, you need companies like GE and Tesla making open compatible products, as well as devising the finances to make it work. GE is already great at finance planning, Tesla is on the right track by using Solar City’s solar bond financial instrument. Tesla can provide a battery that is effectively zero cost to a customer if they have solar, and subscribe to utility cost avoidance supply cycling programs. This is where they will work.

  25. My apologies, my interest is only to find out the reasoning for people when they lease and not to question your decision. Based on the options available here in CA leasing is not the best choice, of course this is my opinion. I realize AZ is not as friendly to Solar as CA has been. What about if you can qualify for an equity line ?

  26. Zero down with monthly bills cut in half was the best option since we didn’t have the funds to outright buy it. The house in is AZ, not CA.

  27. I do not understand your first sentence. And btw I have a background in both computer networking and energy systems. Not sure if this some kind of an analogy to SDN. Batteries have a long way to go before they can be used in such scale. Also batteries immediately add 10% more energy demand into the system because of their losses so of course the utilities love it. Can you please explain the relationship between the Solar deployment requiring increased gas peaker plants ? The whole idea of a peaker plants is that they can be deployed with a press of a button (or automatically based on system demand) i.e. no prep time.

  28. Batteries are worth billions as a software defined micro grid more than any naysayer can imagine. The current energy grid is not efficient. In order to support the 10% peak energy demand, energy grids have to be sized double the average demand and just waste the rest of the electricity they can’t save it. 1% increase in grid tie solar causes a 10% demand increase of natural gas peaker plants, something solar companies don’t tell you. Just a small percentage of distributed batteries will be able to improve the grid efficiencies 10 fold from load normalization. To learn more details, watch JB Straubel’s educational YouTube video on electric grids and how batteries solve the problem. The end result is stabilization of energy prices for the long term. Coal, nuclear, natural gas, oil are all related in the energy market.

  29. Leaving aside the Battery for the moment. Why would you not save on your electricity close to 100% by owning the system. Why lease ? I have 6 KW of solar and hope to break even in 6-7 years. After that its all mine. Those who cannot come up with the upfront payment can take an equity line. States like CA have the PACE program which helps low income people to pay upfront as well.

    As for the batteries I feel Tax funded subsidies are justified when they serve a bigger purpose like a positive environmental impact. That is not the case here.

  30. Fools like you have been saying that since Tesla’s inception. If they were going to fail, they would have done so a long while ago. Their vehicles are rated as some of the best in the world by auto experts around the world. Your baseless opinion simply shows your ignorance.

  31. The lien on the house is simply not a big deal. The solar panels cut our electricity costs in half, and during the summer, we are 100% solar-powered. With a a Tesla battery pack, the system would be more effective, saving even more money (getting large subsidies) and helping normalize the grid.

  32. While their business model is non-profitable, their cars are fantastic and some of the best in the world. Most of the reputable car journalists of the world have said so.

    Don’t confuse a company with it’s product.

  33. No demand? They sell every unit they make, with people lined up to buy them.
    As for “dangerous flammable junk” – which car maker do you work for, and how much do they pay you to slander their competitors?

  34. Tesla cars are 100 % “junk” , the company has no earnings and huge ,growing debt —a true house of cards for only fools to invest in…

  35. @Justin: Tesla cars are complete pieces of dangerous flammable “junk”, the company has no earnings,huge debt and no demand—you are naive and blind my child as Tesla is the definition of “a house of cards”— and very soon to fall–beware and heed my warning and not be a fool any longer…

  36. The article mentions Solar City customers buying these batteries. But Why ? As for their leases, people are not thinking. The only way leases make sense is if you buy them as a business and are able to get an aditional financial advantage out of it such as depreciation etc. In leases people are being coaxed into a losing situation. The 30% federal rebate is taken by Solar city, there is a lien on the house with their panels on it for the next 15 years. Instead of paying the utility bills you pay Solar city. So what does the customer gain, bragging rights that they have solar on their house (making money for Solar city).

  37. You describe an ideal scenrio and you are there to a large extent. People don’t realize that there is only one kind of energy you can produce literally in your ‘backyard’ and that is Solar. (Wind also if are in a good location and esp rural). I too have 6 KW and I use the grid as my ‘battery’ for now. It will take a long time before a battery based system becomes viable. We need a breakthrough in energy storage. For now I think Tesla’s battery solution is just that but not sure what problem they are trying to solve. Their sister company (Because Elon is on their board and is an investor and the primary founders are related to him) Solar City does not offer the best in terms of a solution. e.g. Solar leases. I like Tesla and Elon (A great Entrepreneur) and the car itself. That has been a trail blazer in the EV market.

  38. Sorry for not completing my thought and sentence.

    I have 16 – 250 watt panels already in place on my roof. I’m not a fan of these blood sucking, fossil fuel burning electric companies, whose largest investors arr billionaires like the Koch Brothers, Plus, I don’t want lead acid batteries on my property. Lithium Ion is a great, short term alternative.

    Something tells me there will be a bigger, better bang shortly coming down the pipe.

  39. PG&E is more than willing to support rebates for batteries unlike Solar because they know that the extra energy (Roughly 10% due to loss )for storing in the batteries is going to come from PG&E. This is unlike Solar which actually produces energy and threatens PG&E generation business. Batteries make sense for off-grid homes. Data Centers and similar facilities use back up power generation, (localized UPS) and redundant systems to provide high-availability. These big batteries and tax payer funded rebates still do not make sense.

  40. It’s a company under extreme growth, which hasn’t been able to meet demand. They have awesome products, great service, and huge demand, how is that a house of cards?

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