Tag Archive | "Tesla"

Tesla Motors Enters The Battery Storage Business


Tesla Motors Changes The Energy Markets Forever

May 1, 2015 will go down in history as the day when Tesla Motors entered the battery storage business for home and business applications. It will be a day that marks a major shift in the energy markets, which will have a dramatic and far-reaching effects on many people for years to come.

Tesla’s entry into the battery storage business could be a major game changer for both the company and the widespread adoption of renewable energy in the United States and throughout the world. This would not be an Earth-shattering development if it was not made by the highly motivated Tesla founder, Elon Musk. He is not known to pontificate about unrealistic business plans. When Elon Musk sets his mind to something, such as bringing affordable electricity battery storage to the masses, it is highly likely to happen.

Tesla Motors Enters The Battery Storage Business

GigafactoryTesla’s entry into the battery storage business is not only a likely game changer for renewable energy, but it may also provide a big boost to Tesla Motors’ stock (NASDAQ:   TSLA). Many analysts were scratching their heads when Elon Musk announced that Tesla would build a massive lithium-ion battery factory in the United States, which has come to be known as the “Gigafactory”. The multi-billion dollar investment in the huge battery producing factory in the Nevada desert was thought of as an enormous expense for an electric car company to take on just to obtain less expensive batteries for their electric vehicles.

In hindsight, it is now obvious that Elon Musk had other ideas on this mind, beyond simply producing batteries for the highly sought after Tesla electric vehicles. With the recent announcement that Tesla is entering the battery storage business, the investment in a massive battery producing facility makes a lot more sense. Musk is positioning Tesla to be the dominant player in the world of on-site electricity storage that is unfolding as distributed renewable sources of electricity, such as solar and wind power, are becoming more competitive versus grid provided sources of electricity.

What Is The Big Deal About Tesla Motors Entering The Battery Storage Business

Tesla Home BatterySo, what is the big deal about Tesla entering into the battery storage business? This development has big impacts for Tesla’s stock TSLA. The stock trades at a lofty level that gives the company a rich market capitalization of approximately $29 billion. This valuation is hard to justify if Tesla is simply trying to take on long-established car companies and take a slice of the automobile market. But now, with its entry into the battery storage business, Tesla’s potential revenue and earnings picture has grown much larger. The amount of revenue and earnings that could be generated in the emerging battery storage business, in which there are no dominant players, could be very significant and could justify Tesla ’s high valuation.

Let’s take a look at the projected numbers for the battery storage business to gain a grasp of just how big this business sector is going to be and the positive impact it could have on Tesla’s earnings and stock price going forward. A company called GTM Research studied the emerging battery storage business in conjunction with the Energy Storage Association. They found that the battery storage business was rather small in 2014, with approximately $128 million in sales. However, sales were found to be growing at 40 percent year, with the current sales growth rate expected to accelerate in coming years, as an explosion in renewable energy installations is expected.

Based on current trends, they project that the battery storage business will be generating over $1.5 billion in sales by 2019. No small chunk of change. What really makes it appealing for Tesla is the fact that there is not yet a company that dominates this business sector, so they have plenty of room to grow. It appears that Elon Musk intends for Tesla to be the dominant company in this fast growing business segment, offering both residential and more expensive commercial battery storage systems.   Tesla has the advantage of having their huge gigafactory coming online over the next few years and their close relationship with another of Elon Musk’s companies, Solar City, which will provide a customer base to sell their battery storage systems to.

Beyond 2019, sales in the battery storage business could grow to the tens of billions of dollars each year. At the same time as Tesla is refining its battery storage products and ramping up production, the cost and installation base for renewable energy is expected to explode.   By 2020, wind and solar energy will be cheaper than grid electricity in many parts of the United States and in some parts of the world. This all adds up to potentially huge revenues for Tesla going forward, which should boost the company’s earnings and stock price.

What Tesla Motors Entering The Battery Storage Business Means For You

What does this all mean for an average consumer of energy in the United States and by extension throughout the world? It means that Elon Musk and Tesla may be spearheading a new era in energy. Long the dream of environmentalists and others that wanted to move on from fossil fuels, it appears that a shift to a fossil fuel free energy model may be possible in the not too distant future.   Not just for one’s personal vehicle, but for their home as well.

Here’s how it will work.   If you have solar power system installed on your roof or a wind powered generator on your property, you could use Tesla’s residential battery storage device to store the electricity that you generate. You could then light and heat your house with the electricity at any time of the day or night, using the stored power. If you own an all-electric Tesla car or sports utility vehicle, you could power it using energy produced and stored at your home. It is not hard to imagine how big this could be for Tesla and what a dramatic change it could mean for the world.

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The Outlook For Tesla Motors


Why Investors Are Excited About The Outlook For Tesla Motors

Tesla Motors Logo
With electric carmaker Tesla Motors, Inc. (NASDAQ:  TSLA) taking the stock market by storm, many traders and investors are wondering about the outlook for Tesla Motors and whether further gains in the company’s stock price are likely.  Tesla Motors’ stock has been on a tear, going from approximately $34 per share in March 2013 to over $250 in February 2014, an over 600% gain.

The thing that has investors excited about Tesla Motors is that despite being an automobile company with the word “Motors” in its name, Tesla is actually a hybrid automobile / technology company that is literally setting the technological standard for automobiles in the 21st century and is pushing the envelope on battery technology.  Tesla’s electric cars are not only breaking barriers when it comes to travel range, the company is also producing high technology cars that include many advanced electronic features and high performance cars that accelerate extremely quickly.  The company is branching out into building their own lithium-ion batteries that they intend to use in their electric cars and to sell to other companies that need advanced lithium-ion batteries, such as solar energy installers.

The Outlook For Tesla Motors

Tesla’s stock has become a major momentum stock that has reached an lofty market capitalization of over $30 Billion.  The company’s founder and chairman, Elon Musk, is highly regarded for his visionary outlook and determination in developing and producing a new generation of electric vehicles that has the public excited about buying Tesla electric cars.

Tesla Motors Model X

While the company’s current electric car offering, the Model S, is rather pricey, with a sticker price that ranges from $65,000 to $100,000, the company has had no problem finding buyers for their cars at this high price point.  Tesla is planning on introducing a new model called the Model X during late 2014 that will be a full-size crossover utility vehicle (CUV).  The Model X will sell in a similar price range as the Model S, targeting high-end consumers.

The company is planning on entering the compact to mid-size car market in 2015 with a new model called the Model E that is expected to sell for approximately $35,000.  The Model E will put their cars within reach of many upper middle-income consumers.  With a driving range of approximately 200 miles and a network of recharging stations growing throughout the United States and Europe, Tesla has a real shot at capturing market share with a reasonably priced Model E offering.

Tesla is not only making money selling cars.  The company accumulates environmental credits for each zero-emission electric car that it sells to customers in states that adhere to the zero-emission vehicle standard.  They in turn sell the environmental credits to other automakers that need to meet the zero-emission standard.  Tesla makes up to $35,000 from environmental credits for each car that they sell in applicable states.
Lithium Ion Battery
Tesla also announced they are planning on building a lithium-ion battery factoring in the United States that analysts have dubbed the Gigafactory.  By building their own lithium-ion batteries, Tesla will not only save money on a key component for their cars, but they also will be able to sell batteries produced at the factory to other users of lithium-ion batteries, opening up a new revenue stream and profit center.

Reasons To Be Cautious About An Investment In Tesla Motors

While Tesla Motors has made incredible gains in recent years and many analysts and people in the Wall Street investment community think the country has a bright future ahead of it, there are reasons to be cautious about investing in the company.  The main reason to be cautious is simply the current market capitalization for Tesla.  At over $30 billion, Tesla already has a lot of future growth expectations priced into the stock. If sales do not live up to projections, and the company disappoints when it comes time to report revenue and earnings, the stock could drop in price, as the market lowers the company’s perceived valuation.

As is the case with many companies involved in the roll out of cutting edge technologies, Tesla’s stock has raced higher on expectations by investors that the company has a game-changing technology that will someday translate into tens of billions of dollars in sales and a higher stock price.  Such expectations may be correct, but they also may be misguided and proven wrong.  It is very hard to predict how technology will change and develop over time.  If electric cars become viable and the major automobile manufacturers start to mass produce electric cars, it could leave Tesla as a niche player in a crowded market.  Although Tesla’s electric cars are innovative and modern, consumers may opt to purchase a less expensive electric car from a well established automaker that has a network of dealerships and a reputation to stand behind.

Reasons To Be Optimistic About An Investment In Tesla Motors

While there are risks associated with buying a high-flying stock like Tesla, there are also reasons to be optimistic about an investment in TSLA and the outlook for Tesla Motors.  Tesla is certainly not the first high-flying stock to reach a lofty valuation that raised the ire of many skeptics.  Long-term winning investments in Amazon and Google both were subject to speculation that they were grossly overvalued soon after they became publicly traded companies.  With a 2014 Price to Earnings Ratio (P/E Ratio) of 74.0 and Price to Sales Ratio of 14.9, TSLA is richly valued.  The key is whether or not Tesla’s projected sales growth can live up to expectations.  If they do, the company may very well grow into its current lofty valuation and continue to grow from there, rewarding current shareholders with a higher stock price.

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SEC Update: Social Media Can Now Impact Investment Decisions


Recent trends and announcements have found that investors using social media to stay connected to instant updates were able to make smarter decisions with their recent investments. As an investor, annual reports, quarterly statements, and earnings releases are all you read to find pertinent information. After the SEC’s latest announcement, many investors can add the likes of Facebook and the rest of the social media family into their daily reading material. If you think about it, this decision was inevitable, just look at the evolution of social media within the last decade. In addition to the explosive social media growth, the birth of smartphones has given you the perfect combination to stay connected wherever you are. With so many eyes constantly using social media, it was only a matter of time before companies and investors alike found a valuable way to communicate and make smarter, faster decisions.

How Can I Use Social Media With Investments?

While this dramatic change is still in it’s early stages, investors are already feeling the pressure. Consider the fact that investors are already scouring the web for competitive data and financial projections. On top of everything else, these hardworking investors now have to hold a vigilant watch on targeted social media profiles to hopefully gain some leverage against others.

The details of using social media for company announcements are still being worked out. It seems that the two biggest social media titans Facebook and Twitter will be the outlets to flock to for important news and announcements. For now, investors will have to begin developing their strategies and selecting the companies they will be following. What is apparent is SEC’s stipulation that companies must let investors know how they specifically plan on using social media.

Tip: Investors, take a look at the bottom of quarterly reports, earnings releases and annual reports. Companies will most likely mention what social media platforms they will be using!

How Companies May Use Social Media

Though using social media is still in early adoption stages, companies like GarmineBay and Netflix are already fine-tuning their social media strategies. On April 2nd, they released information describing their social media sources and where they plan on posting pertinent information. These outlets include two of the company’s blogs, the company Facebook and Twitter, as well as the CEO’s public Facebook profile. GPS giants Garmin have been using Twitter’s feed to keep investors updated on their quarterly earnings, annual reports and more. The benefits of companies using social media are abundant, as each investor closely monitoring statuses, tweets, etc will have an edge against the rest of the competition. With that being said, investors still in the “old school” mindset utilizing traditional resources will fall off if they cannot adapt to the available resources. Just look below to see examples of how Tesla and it’s CEO have recently been pushing investors to use social media to stay connected.

investors using social media 2 investors using social media 3

(photo credits to: ‘The Buzz on’ CNNMoney.com)

Not All Companies Will Use Social Media

For many investors, the inclusions of social media outlets are more of a gimmick than valuable information. When you look at this trend logically you find yourself wondering how you will be able to keep up with hundred of different companies that you are following on Twitter or Facebook. Just thinking of it can be dizzying. Many companies do not want to hassle their shareholders and investors by making them chase down their latest status updates or Tweets. What is more likely to happen are companies using social media to direct their investors and shareholders to their official website or SEC’s site to find their latest releases.

Be Wary Using Social Media…

Before reaping any benefits of using social media, investors must make sure all the information they are gathering are credible sources. Last month the entire market was affected by a tweet that was posted on Alternative Press’ official Twitter. The problem though was that the report was false. As you follow the official pages of each company be sure to look out for a distinguishing mark acknowledging a credible source. There are even rumors flying around mentioning a special badge to mark important posts like annual or quarterly reports, earnings, and press releases. It is also good practice to confirm whatever information you gather with what is found on the company’s official website.

For more information on Twitter’s hazardous effect on Wall Street take a look at this infographic SocialMediaToday.com posted late this last April.

investors using social media

In Closing: Using Social Media, Is it A Good Investment?

As of right now using social media for smarter selections and strategies are still in early stages. While many investors will not recommend using social media to their companies, it is only because of the demanding amount of time that would be needed for due diligence. Investors already work with an abundant plate of information, so for now social media should be seen as the cherry on top. The garnish if you will. If anything, using social media will at least confirm the information and strategies you are implementing rather than being your number one source. If social media does become a valuable asset in the eyes of shareholders, companies, and investors alike you can bet your bottom bitcoin that software engineers and other services will find a way to create a program consolidating all of this information easily. When that does happen, the combination of using social media’s instant updates and traditional resources will be worth every penny.

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