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Tesla as an opportunity of investment

I belive that all people that are reading this post think that Tesla is a great Car Company, the most advanced, the most innoative and the most oriented at the future.
This is the reason for which I'm evaluating tesla as an opportunity of investment and i would like to discuss with you about this.

Thanks for the explanation, Brian. The mechanics of shorting are largely hidden, but I think it is important to know how it works if you lend your shares.

The samsung (also panasonic) deal to build dedicated battery factories is huge. Increased battery production not only will be significant for vehicle production, but also for their energy storage business for residential and commercial spaces.

By 2017 30% tax incentive virtually disappear leaving it difficult for solar to compete with utilities on cost. However, Solarcity will continue to beat utility rates with a cheap battery storage solution. How? They will have amassed 1 million customers by 2017. Each will have battery storage included in lease contract, or will be retrofitted with a battery storage without raising/changing lease rate. Tesla will be providing those battery storage units discount unavailable to the competition. That is potentially hundreds of thousands of battery packs to be produced in the next 5-10 years just for solarcity alone. How will that affect the bottom line, future revenue projections, current market valuation?

Not only will Solarcity snap up current utility customers right from under their nose in the next five years, Tesla will be right there with them to do it. Comparable utility companies (where the sun is good) are valued around the 20 billion mark. Solarcity is currently around 4b. Again, how does/will this reflect on the current/future valuation of Telsa?

Energy storage is by far the most significant business to emerge from Tesla motors. I feel it will have to spin off a separate company in order to deal with the magnitude. As far as investment opportunity, Tesla's current valuation should easily double in the next 2-3 years. Beyond that, I feel much much more if it can produce energy storage systems to meet the enormous latent demand...

There's a problem surfacing with storage etc.: having your cake (full grid access on demand) and eating it (substituting storage/renewables), too.

@ Brian H My dream is to go off the grid altogether and stop paying unionised linesmen 150k + benefits a year. Doctors are now earning 150k a year. My highest daily usage of electricity was 91 kwh , in 2009 with 7 tons of a/c running 24hrs a day. The 85 kwh battery can handle 99% of people's needs including cloudy days if you have a big enough solar array.

I failed to mention Solarcity will own all those highly recyclable batteries as well. Can refurbish at a low cost and use again. Same goes for the solar system. This is why it is so important to raise as much funds and scale as fast as humanly possible right now, exactly what is happening. Execution is spectacular. Solarcity will establish the battery storage market for tesla to fill. End state is to create a "grid free" distributed energy solution (and I think they currently exceeding their own timelines and milestone objectives.)

Tesla have been one great, and scary, investment. It was scary when I started buying most of my shares at $35-40. Piled in more than I should have. Could not sleep and I was waking up at 3 am. Sold 20% at 107 so I could sleep better. Have to keep my mouth shut, lest I get sent to the funny farm!

However, when I drive my 85P/Pano, I feel much better. It is a very good car. Outside looks great. The interior is minimalistic and not plush like a hi end Lexus, but feels comfortable. Park assist was not available, but I got used to the size and it ok without it. With time Tesla will improve and add features like smart cruise, collision avoidance, etc. AWD should be fun to drive. Without too many chargers around, a 500 mile battery would be a reason for me to upgrade.

I think that Tesla will be able to manufacture 100,000/year rate by 2015 end, with $90+K ASP, 25+% gross margin. Supercharger and geographic expansion will drive the demand. They are already producing at the rate of 700 cars/week.

Let's not forget, the Fremont EV plant is shipping partially assembled units to the European Tilberg plant for final assembly. That means the Euro-EVs may be zipping through Fremont faster than people realize, leaving more production time for fully assembled EVs sold in America. I'm reading about some large production numbers, significantly past estimates.

If Elon is thinking first principles as I assume he is, he understand energy storage is the link between production and consumption. If he works from this energy storage premise, I feel we haven't even scratched the surface of what is to come in terms of growth and valuation. There are endless growth opportunities across multiple industries (nearly all) stemming from Elon's energy storage business.

I keep hearing this is a cult stock, it's a momentum stock, it's this, it's that... all just shots in the dark is reasoning why the stock price/valuation is what it is.

The truth is people see the writing on the wall. People see Tesla/solarcity (everything else Elon works on) as the future. The stock price is what it is, because people want in NOW for what it will be for decades to come. Not 1, 2, or even 5 years. Decades. People aren't looking at production numbers in 2014, 2015, or 2017 even... people are seeing numbers a decade out and beyond. Just look at the growth in sales of the Model S... their first car built from the ground up from a new car company, has outsold all the majors in the same price range... when in the last 50 years has that happened? When has that ever happened in the automobile industry in America? This will be same with the Model X, and continue with the Model E and all vehicles after. The growth is exponential. Add in the developments with the battery tech (energy storage business) that no one else in the world has commercialized like tesla... and something special, unique, and once of a lifetime is happening. This is is why the stock is where it's at and continue to rise. Same with Solarcity. Solarcity has nearly doubled every year, year over year, since it's inception in 2006. And it's projecting to do the same for years to come. Come on, that's incredible. People want in now to be apart of the heights these historic companies (and more broadly energy production/consumption revolution) will go. They are an investment in the most pure sense of the word and that's what the talking heads/critics don't get.

Energy energy storage mandate for utility companies coming...

I got a real chuckle out of reading the beginning of this thread back in February. "Shares are $28, what should I do?" If only I'd known then what I know now. I could have bought my Model S on share profits alone. Oh well...

Sorry JK2014, what's the dedicated battery factories panasonic is building for Tesla? I assume you're saying that Tesla has some ownership in these that will bode well for them in selling to the worldwide industry for cars and homes...

If they're just purchasing Panasonic batteries - this would mean Panasonic would enjoy the worldwide market as it grows.

Thanks for clarification, I've probably missed something obvious.

Tesla batteries are simpler and cheaper than the industry standard, as they move the fire protection etc. off the battery "cap" and into the case structure. I think they also tweak the chemistry. All patent protected.

A big buying opportunity? TSLA dropped about $14 today, mostly based, it seems, on articles in German Manager and Seeking Alpha. The first based on a confusion about SuperCharger costs in Europe, and the second trying to fit TM into the ICE-maker mold.

Seeking Alpha have been bearish on TSLA for a while... that's not news. Even the German story is not news.

Seeking Alpha is not a "staff writer" site. All articles are contributed by readers, who get a piece of the ad revenue depending on hits.

7 billion 18650 batteries over the next 4 years in Panasonic deal. Expect a significant deal from Samsung soon. The capacity question is quickly being solved with battery production scaling.

Scaling batteries means cheaper batteries and that's revolutionary tipping point not only for tesla motors automotive sales, but also for energy storage in solarcity PV systems leases.

Sunpower(solarcity's closest competitor) capacity is capped for 2014, leaving the door even wider open for Solarcity to gain market share in residential/commercial space. Together with batteries scaling, solarcity may be ready for PV/energy storage combo lease sooner then anticipated in 2015...

I'll say it again, buy Panasonic stock. Mine is up 20% in two months.

I made a sizable investment on TSLA starting around $35-40. When it crossed $40, I bet the farm. i figured I had cushion from the initial shares. At $107 I sold 20% of some of the expensive shares… figuring I could sleep better. Then the stock hit $190+ all time hi, but I did not sell. When it started to come down and it hit $160, I sold out my IRA positions but kept some of the individual account. The value of my holdings have grown way beyond my reality… enough to live on the amount. I was waking at 3 am worried about loosing most of it.

Now, I want to keep what I have in Tesla. If the stock gets way cheap, I will add some shares, but not bet the farm again since price is hi now. If earnings beat significantly, I will buy at a way higher price, but a smaller amount. Just trying to manage/conserve capital and risk.

I think that Tesla can truly change the game in automobile. I own a 85P/Pano and I truly enjoy driving the car… just that I am restricted now on taking long trips, but that will change in a year. When I drive the car, I tempted to buy shares!

I have invested in great stocks over time… like QCOM in late 1998. That stock went from $40 to $1700 before all the splits in early 2000 (it was 800+ after a 2:1). That and other stocks had made me a ton of money. Mistake? Yes, not selling on the way up, 10% at a time. It is a great company, but the stock never recovered.

Tesla could well be a $100B company if it disrupts the ICE market… 5-bagger from here. I just want to control my risk.

Thought I would share with the Forum.

Bubba2000 --

Why sell at all? Did you go into Tesla looking for short term gains? Tesla is at the very beginning of it's growth (as you know), it won't mature (at least from my perspective) for at least another decade or two. Seems to me as a long term bet.

I see GenIII sales as a decision point for taking profits or getting out and that's about 4-5 years away. Helps me sleep at night too!

My investment story: Was at the mall one day, saw the the Tesla store, didn't think much of it, thought it would be another gimmick car, but sat in it, learned about (and impressed by) it's range and capability (performance and safety), googled Tesla Motors, learned about Elon Musk and his ambitions, got nervous(started to see the size and scope of this car), didn't sleep all night reading quarterly reports and watch Elon stutter in youtube videos, consulted with my wife on investing for the first time 10 years, opened a brokerage account, invested a substantial amount of funds at 29.70 last year...

I guess I have reason not worry about losses (nor should you at $40/share), but still don't care if it goes to 200 or below 29.70 since I intend to hold for years to come since that's the only time horizon I feel really makes sense for investing with Tesla.

The only reason I lose sleep is that I made a $40k deposit on the car then paid cash for it. Lots of opportunity cost there...
At the same time, the stock did absolutely nothing for almost a year and a half.

I haven't pulled out any shares. I think this is just the beginning of something huge. The main reason I invested to support the company and their vision anyway. (Hence the $40k deposit.)

You sound like a great candidate for dollar cost averaging: $Xk/mo, regardless of price.

I am very curious how much effect on cost/kwh the panasonic deal will have on the overall battery system (as is everyone else!). I'm betting Tesla will stick with the 18650 form factor for a very long time since the key factor of EV adoption right now is not going to be too much about range (since I believe the 18650 chemistry leaves room for 300+ range EPA from fewer cells), but about cost.

How far can they drive cost for their current patented battery energy storage system? That's the real question for mass adoption. Not finding a better tech. There will probably be better technology available in the near future, but it won't be capable of being commercialized (supply chain network, economies of scale, etc...) in the next 3, 5, 10 years effectively.

The single best bet (in the entire auto industry)is the 18650 for the next 5 or more years. Therefore, how will the economies of scale now afforded by 2 billion cells over the next 4 years impact cost?

If the Panasonic deal proves to reduce the cost significantly (which I'm assuming Tesla will guard that info heavily) it also will have a significant impact on their stationary energy storage business as well. (i.e. Solarcity PV system/energy storage lease combo)

If Solarcity can offer at 23kwh battery storage system (23kwh average daily use in American households daily) instead of the current 10kwh system with their PV leases and still beat utility cost/kwh, then this will have a significant impact on future orders for Tesla batteries outside of automotive sales.

Elon and JB Straubel are both on the board of Solarcity as well. From recent talks, as well as from seeing massive battery storage systems in place currently at supercharger stations in California, they are keenly focused getting to this reality in the near future.

A special note: JB Straubel noted at the GCEP Symposium (October 2013) that all of the various estimates and comments about the actual cost/kwh of the battery system are completely false. He said the cost/kwh is a lot less then what is speculated. As I remember it now, he also said the cost/kwh is a guarded number not to be revealed. My read on this, is the cost is a "surprise card" to be taken advantage of in quarterly reports, earning calls, future announcements, etc...

Tesla will potentially roll out 10,000 home battery storage units (10-12kwh) by year end 2014. Estimated cost/system is 15K (approx. 5K purchaser cost after incentives). That right there is approximately $150 million in additional revenue outside auto sales for 2014.

Folks, this is going to be big business if they intend to keep pace with Solarcity customer goal of 1m customers by 2018. Especially if Solarcity offers battery storage as a package lease deal. If costs stays around 10-15k per battery system and potentially 500k of solarcity customers take the combo deal, Tesla is looking at $5-7.5 billion in additional revenue over the next 5 years. I hope many will all begin to see the profound impact this will have on Tesla's bottom line.

Note: I've noticed Solarcity's recent investor slideshow is already highlighting "real time energy storage control" as part of its robust technology platform.

And I'll make a bet that solarcity will purchase every single one of those 10k battery storage units if it fits within their zero down/less than currently utility lease structure. Could very well see an announcement early next year and possibility at earnings call tuesday(wildcard) of a Solarcity/Tesla partnership on this front...

I have trade in some of my TSLA-stockprofits for Umicore-shares. They are world leader in recycling batteries, alltough their CEO told tesla is a hype, i think this can be an opportunity for the long run?

The stock was up over 8% today, in prep for the SH meeting. Good news anticipated!?!

It's beginning to happen... Regulatory environment increasingly favorable to Tesla's/solarcity's big entry into energy storage market...

Again, solarcity creating the market for Tesla battery storage with each residential/commercial contract signed(1m by 2018). Energy storage is the natural progression of clean energy delivery and energy savings for utility customers. Pricing at the moment is $10/month addition to solar energy bill...

Massive growth coming very quickly in 2014 and Tesla will be right there to benefit.

Hm, a few megawatts here and there aren't going to do the trick. Lotsa gigawatts needed, please.

Don't worry, Brian. Lots of megawatts surprisingly adds up to lots of gigawatts! Especially now that securitization has opened up. No longer will Solarcity have to tap the equity markets (dramatically reduce dilution from now on, really good for investors). Bonds backed by government housing(i.e.120,000 Army, air force post housing hawaii&texas), municipal power (i.e. Hawaii, Maryland, Cali,), k-12 school, universities, etc... some of the most, if not THE, most secure assets to securitize in the entire world. These bonds will quickly be rated very, very well (if not the best) very soon. Solarcity will be able to get great rates for capital. I feel the next round of bonds will be over 100 million Q1, then over 200 million per offering after that and they will be snapped up the moment they hit the market. I see easily over 500 million in capital (without dilution to shareholder value) in 2014 easy.

That's a lot of capital to ramp up operations to meet the already nearly 250 MWs of back long. Already booked 100 MWs in Q3, and expect well over that in Q4.

It will be a monster 2014 for Solarcity. Their long term contract payments will balloon from $1.7b right now to over $3b this time next year. From around 600MWs deployed to nearly 1.4GWs. Can't imagine what 2015 is going to look like...

Again, the market is being set up right now for Tesla battery energy storage. If just the military contracts for energy storage, we're looking at 120,000 homes needing 120,000 Tesla energy storage units. That is potentially $1.1 billion plus to Tesla's bottom line... and this could just around the corner late next year...

"We are thrilled to leverage Tesla's technology leadership in energy storage systems, charging and power electronics to enable this exciting SolarCity launch," said Tesla CTO and co-founder JB Straubel. "The economics and scale that Tesla has achieved in the automotive market now make stationary energy storage more cost effective and reliable than it has ever been in the past. We expect this market to grow very rapidly now that we have crossed this economic threshold."

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