What Does Elon Musk Envision That Justifies Tesla鈥檚 Stock Price?
Tesla Motors, Inc. (NASDAQ: TSLA) is much more than just an electric car company with an eccentric leader. Many analysts have written off Tesla Motors as just another flash-in-the-pan electric car company that will soon fade away and join the trash heap of bygone car companies. What they have gotten wrong is that they have failed to figure out what Tesla鈥檚 visionary leader, Elon Musk, really has in store for his company. Once one understands that the future of Tesla is much more than their sleek award-winning electric cars, the excitement that many have for Tesla鈥檚 future becomes crystal clear. Tesla has big plans for the future that will likely change the way everyone lives. Elon Musk鈥檚 vision extends well beyond electric cars and into the heart of what makes modern societies run. In reaction to oil price shocks that occurred over the years, various attempts have been made by a wide array of companies to develop usable electric cars that have the performance and range needed for typical driving needs.
The problems that have yet to be solved when it comes to making practical electric cars include the cost of the cars, the driving range between recharges, and the time that it takes to recharge an electric car鈥檚 batteries. Up until now, electric car batteries and their recharge rates have simply not been suitable for real-world driving conditions, and their cost has been out of reach for the majority of drivers. Tesla鈥檚 luxury Model S sedan provides a driving range of approximately 240 miles per charge and can be recharged to 80% in thirty minutes, using Tesla鈥檚 proprietary Supercharger technology that is available at an ever-expanding network of public charging stations. Tesla鈥檚 cutting-edge electric cars are only part of the Tesla story. A part that misleads people into thinking Tesla鈥檚 future success is dependent upon the success of their electric cars. A look deeper at Elon Musk鈥檚 vision for Tesla reveals why some believe Tesla will change the way we live, while benefiting financially in a tremendous way.
Elon Musk has much larger ambitions than just changing the automobile industry by producing the first practical electric cars that gain mass appeal. Musk is aiming to remake and profit from a far larger market: the energy market that powers modern economies. Tesla rocked the world with their announcement in September 2014 they will build a 鈥淕igafactory鈥?in the United States State of Nevada that will produce lithium-ion batteries on an enormous scale. Tesla announced in November 2015 that their second 鈥淕igafactory鈥?will be built in Germany, while plans for an Asian version of the 鈥淕igafactory鈥?are also in the works. In May 2015, Tesla revealed a line of battery energy storage systems that are capable of storing energy for homes, buildings, and large utility-scale applications. The version for homes and small buildings is called the Powerwall. It is a relatively thin piece of equipment that can be mounted on the wall of a garage. 3,000. The large utility-scale version of Tesla鈥檚 battery energy storage systems is known as the Powerpack.
25,000. These batteries may sound pricey, but they are roughly half of what other companies are charging for similar battery energy storage systems, and if used properly to save on electricity costs, can pay for themselves over time. What Does Tesla鈥檚 Entry Into Battery Energy Storage Systems Mean For Its Stock TSLA? Tesla Motors, Inc.鈥檚 stock (NASDAQ: TSLA) has raced higher since it started trading publicly in June 2010, gaining over 500% percent. 200 per share. While such a high stock price may make some investors concerned, Tesla鈥檚 entry into the battery energy storage systems market may justify an even higher stock price in coming years, as revenue growth accelerates. The potential market for battery energy storage systems that can power homes, buildings, and serve the needs of electric utilities is enormous. 8.50 billion in 2024. If Tesla is able to capture a large portion of this market, it is easy to conclude that the revenue and potential earnings growth for Tesla will be tremendous over time. This high rate of growth should support a higher stock price for the company鈥檚 stock through 2024 and well beyond. 50 trillion by analysts who follow the energy space.
