While the world is glued to Tesla’s pre-order flow counter for the upcoming electric Model 3 sedan, the company is vowing on an even bigger disruption in the energy storage space
Tesla Motors Inc (NASDAQ:TSLA) has rocketed 10.6% over the past one month amidst optimism surrounding Tesla’s highly successful unveiling event for the upcoming mass market Model 3 sedan held on march 31. How do we know it was successful? For a company that barely invests in mainstream marketing efforts, Tesla has been able to since bag nearly 400,000 pre-orders for the mid-priced electric sedan –due for a rollout late next year. However, that is not where the thrill for Tesla fans ends.
The company is saying it expects to sell more energy storage units this year than the entire market did last year, when it had quietly set up its “Tesla Energy” business unit. The claim comes from a report issued by GTM Research.
The firm’s analysts claim Tesla could sell 168.5 megawatt-hours of energy storage applications to its sister company SolarCity which is already the country’s largest supplier of solar panels. That represents a 60% jump over industry-wide sales last year and almost a six fold increase in what Tesla sold SolarCity in 2015.
Last year, the company’s CEO Elon Musk had said the company’s energy storage ventures could one day trump the company’s electric vehicles business. With Model S orders sustaining the growth momentum and order flow for Model X and Model 3 literally taking off, it seems Tesla is content on ensuring the energy business does not fall behind.
Earlier this year, the company quietly removed the 10 kWh version of the Powerwall – its home energy storage solution – to focus production mainly on the high-in-demand 7 kWh version. Apparently Tesla hopes it can ramp up production to meet order flow for that version.
It has all the reasons to be hopeful too, with the company’s massive 10 million square feet, $5 billion lithium-ion battery plant nearing completion in the Nevada desert outside of Reno. The company is aiming for a partial launch this year and eventually hopes it can expand volumes to full capacity (half a million battery units per year) by the end of the decade, at which point economies of scale could allow for a 30% reduction in battery costs – which comprise bulk of the production costs for both; stationary storage applications like the Powerwall as well as electric vehicles.