Tesla’s CEO Believes the Future is Bright in Electricity Storage Market than in Car Selling

tesla powerwall battery

Tesla is eyeing a new customer, different from the automobile industry; the power grid.

On May 31, Tesla Motors Inc (NASDAQ:TSLA)’s CEO Elon Musk gave a presentation at the annual general shareholders meeting, and he said that half of the company’s batteries would likely go to the electricity storage market rather than their cars if they expand the battery business as they intend to do.

The company has a Gigafactory in the Nevada desert, which they co-own with Panasonic. The factory is expected to bring out about 35 GWh every year from now of the newly designed lithium ion batteries that Tesla plans to build. Musk also speculated that the figure above could triple depending on the demand. The factory will open this year and is projected to reach full capacity by the year 2024 if all goes to plan. The CEO said that he wanted the stationary storage applications to be responsible for half the output of the storage applications, which would see a rise from its earlier projections of one-third.

He said he believed the electric storage business looked like a viable option and a faster-growing business for the company and could even overtake the car selling a business that the firm mainly excels in at the moment. All the key obstacles that are seen when it comes to selling cars globally such as regulations and laws are not as prevalent in the electric storage business. Musk said that he believed no one was tackling the field right at the moment. He stated that he expected the rate of growth for the battery packs to be faster than what the Tesla cars own had been like.

Tesla managed to increase their deliveries by 20 percent from 40 percent to 60 percent since 2014. The electric car manufacturing firm managed to deliver about 50,580 cars in the year 2015.

The Tesla Powerwall for the home product has not proved to be a bestseller yet for the company. Priced at $3,000, the company has decided to discontinue the 10kWh version from this year onwards. Most analysts believe that the Powerwall is mostly overpriced for most consumers. Rather, Tesla is going to shift all their grid-scale applications to a market where the battery systems can give storage and balance electricity supply for the regional electrical systems. Musk said that the company received orders for 80,000 grid scale Powerpack batteries, which amounted to $40,000,000 in quarterly sales. This figure could rise to a fee billion dollars by 2017, he says.

One of the company’s grid projects is in Hawaii and is one of the biggest. The company named Solar City, is primarily chaired by Musk and is currently making use of the Tesla batteries as they build a solar power plant together with a 52 MWh battery bank.

Musk has been facing criticism also, and most of the people say that pricey batteries will probably not give more than the same niche services for the grid. Bob Lutz, former vice chairman of General Motors, said that the idea of using battery packs as an alternative was a hundred-year-old idea which was highly expensive and said the whole idea was highly overvalued. He said that the assembly of the raw materials was the highest cost in lithium ion battery.