This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

How Tesla Goes to $320

By having the S and X be exceptionally successful, it leads to the Gigafactory, which Musk said we would hear more about this week. The electric utility sector is a $400 billion market in the U.S. and $2 trillion globally. Tesla could successfully compete in this space, as its estimated 7.2 million fleet of cars (by 2028) will have enough stored energy capacity to exceed the daily electricity consumption of Mexico, coming in at more than 443 gigawatts.


Tesla is competing with other automakers in the electric car market right now, including General Motors (GM) with the Chevy Volt, Nissan NSANY with the Leaf, BMW with its i3 and several other alternative fuel vehicles, including Toyota (TM), which unveiled its hydrogen fuel cell at the Consumer Electronics Show in January. However, it's not just about traditional vehicles, other companies are getting into the game with autonomous, or self-driving cars, including Google (GOOG).

Jonas believes that autonomous cars will have 100% penetration by 2022, as consumers use cars more like computers and smartphones. The idea is that the car's interior will primarily be used for entertainment, with the car doing most, if not all, of the work to get from point A to point B. For that, Jonas believes there's no company better positioned than Tesla to make this movie. "Tesla's fleet is 100% electric and connected. As the role of software engulfs the car, the world's only Silicon Valley-based car company has the upper hand. We see autonomous cars contributing $5.6 trillion in economic savings globally."

Aside from being just an automaker, Tesla's future really lies in disrupting the energy grid, which may be part of the Gigafactory and how the company and its partners use it. On the conference call, Musk said Panasonic would likely be a partner (Panasonic already partners with Tesla on its lithium-ion batteries), and that there could be other partners as well.

The Supercharger network also helps Tesla's advantage, as it continues to build it out, and allow it to continue to gain first mover advantage not only in the electric car market, but several reasons. Not only does the Supercharger network increase awareness of the company and clean energy, as Jonas notes, but it also addresses range anxiety (the fear of running of electricity), it's a good marketing expense, and it "[e]ncourages greater numbers of electric miles driven, providing a real-world laboratory for Tesla to track the performance characteristics of its cars for continues improvement to the powertrain."

With the Supercharger network, which was announced last year, is great for building brand awareness, it can help play a role in Tesla's involvement in building out the energy grid, and storing energy. "A successful roll-out of hundreds (one day, perhaps many thousands) of charging stations gives Tesla the unique opportunity to perfect its battery system characteristics in terms of chemistry, reliability, safety, cost, software, charge cycling and recycling." Tesla has said that by 2015, it wants 98% of the U.S. and Canada covered by the Supercharger network.

Jonas notes that Tesla's battery aspirations are the key for Tesla's future as it pertains to disrupting the energy storage industry, as "Current US energy storage capabilities is both antiquated and limited." The 24.6 gigawatts that is in the deployed energy storage system, that accounts for just 2.3% of total U.S. electricity production. The far majority of that (95%), comes from pumped hydro (water), and is pretty infrequent and inflexible in terms of geography and environment. This is where Tesla comes in, with its proposed Gen III battery, which it plans to get under $200 per kilowatt hour (kWh) by 2016 and 2017.

This last big point from Jonas is perhaps the most important:

"Tesla's plans for a 'Giga' battery factory starting to get more attention as a call option on the economics of mass produced batteries and the business model. We found the final sentence of Tesla's prepared remarks at the Detroit auto show on its plans to build the worlds 's largest lithium ion battery factory intriguing: 'It is a massive, massive opportunity to push the cost curve down to levels people haven't even dreamed of yet'."

--Written by Chris Ciaccia in New York

>Contact by Email.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs