Elon Musk is expected to boost its share from new directions.
Since the beginning of the year, the automobile giant; Tesla stock has been fallen down by 30% from its all-time high in July. Despite strong production guidance of the company for the year 2016, analysts still consider the stock of the company to be very expensive therefore CEO Elon Musk is trying to integrate different businesses and the crucial business which he has found is the SolarCity Corporation.
Tesla stock stands far away from its rivals’ stock. Although earlier analysts supporting the company’s stock used to argue that since the Palo Alto, Calif. firm is the pioneer in the tech embedded electric cars therefore it cannot have plausible relationship with the rivals like Ford. However, this notion cannot apply anymore as now the competitors have taken the charge of developing the electric cars. Moreover, instead of accelerating, Tesla’s growth also went down. Lately, Ford Motors Company had announced that by 2020, 40% of its vehicle line up will be electric cars. These future prospects have raised the skepticism of the investors who have started adopting pessimism for the stock.
But Elon Musk’s company is not famous for giving up. It is an open secret that the $22 billion organization has been building a 5.5 million square foot Gigafactory for which the company will bear an estimated cost of $5 billion. The factory is being set up for the production of solar powered batteries and other forms of electricity. Along with boosting the production for the company the factory blazes the trail for the Californian company to sell to the consumers and utility companies its batteries.
In 2015’s second quarter, the automobile giant uncovered Powerwall and Powerpack. The former stores energy and then powers the house. It has a retail price of few thousand dollars and will be sold to consumers while the more powerful Powerpack is intended for the use of utility companies and businesses. Over the course of a week, after the date of announcement, the automobile titan started receiving orders of around $800 million.
Whether SolarCity was Tesla’s one of first customers who ordered the Powerpack or not is still not known however the Silicon-Valley business had announced recently that Tesla’s Powerpack has big role in SCTY’s project in Hawaii. With the Hawaiian project, SolarCity projects to bring in the U.S. the first ever utility scale system. The project expects to deliver solar power throughout the night.
This will result in non-renewable energy sources’ reduction and much higher consumption of the integration of Californian firm’s Powerpack and technology of SolarCity. Through this proposed integrated technology SCTY will have power generation which would be 20% more per kilowatt hour. Also, the technology will increase the power output and be able to deliver power at night. For the Musk’s company this will mean higher revenues as the Powerpack will be subjected to more per-hour billings.
Since Elon Musk is the chairman of SolarCity Corporation therefore it is quite implied that both the companies will be reaping competitive advantages from the partnership. The alliance will likely generate higher revenues for Tesla. The new stream of revenue would be the supply of rechargeable energy products. Resultantly, the company will lessen the higher reliance of stock on the vehicle lineup and through new revenue sources the stock can be easily boosted.
At the market which closed on Friday, Tesla Motors Inc. stock had a price of $166.58.