Tesla‚Äôs Energy division is big, and it is time Wall Street starting recognizing its achievements when talking about the company‚Äôs stock and its skyrocketing price.
One thing I notice when reading analyst notes or even investment expert‚Äôs thoughts on Tesla is their views are primarily based on the automotive side of things, and rarely do we see any stock insight on the energy side of the business. To me, this is unacceptable because the energy portion of the company is sizeable, and it is just as much a part of the transition to sustainable energy as the vehicles are. In fact, it could be more.
I sit and think about all of the TSLA articles I‚Äôve written over the past few months while the stock has skyrocketed into a realm of Wall Street legends. It‚Äôs up almost 4x for the year, and basically, every evaluation or investment note from every big investment firm talks about automotive technology improvements, the company‚Äôs performance in other countries and markets, or how batteries are leading the charge in terms of EV range.
But why not talk about the energy side of things? Why not talk about Tesla‚Äôs other endeavors, which continue to grow quarter after quarter. Why is this side of the business being swept under the rug so often? Is it because cars are used by everyone, and perhaps everyone in the world could own a Tesla vehicle, and not everyone could own solar because of their environment or climate?
I don‚Äôt think that could be the reason, because Tesla vehicles are not available everywhere in the world as of right now either. But let‚Äôs be honest and look at the facts of what Tesla Energy is instead of what it isn‚Äôt.
Tesla‚Äôs Energy division will end up being as big as the automotive side of things. At least, that‚Äôs what Elon Musk said during the Q2 Earnings Call earlier this week. It certainly has the potential to be just as big, if not bigger, than the automotive side of things. Eventually, people will have to ditch their current power source for their home.
Solar is becoming cheaper, and with Tesla‚Äôs subscription and rental programs, people can afford to have world-class solar panels attached to their house for a fraction of the price. They also will not be forced to put out lump sums of cash in order to install solar panels on their home.
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Tesla Solar is also one-third less expensive than the industry average, according to the Q2 2020 Update Letter. Additionally, Solar Roof installations ‚Äúroughly tripled‚ÄĚ from Q1 to Q2, which is an outstanding statistic because it means the company is truly stepping up its game in terms of output in that front.
Powerwalls and Powerpacks for large-scale projects are also being used at more locations. In Australia, the Tesla Big Battery continues to save the area it is located in from widespread power outages, and other systems are being used across the country to transition the world to sustainable energy production and storage.
Elon and¬†Senior Vice President, Powertrain and Energy Engineering Drew Baglino, talked about the Megapack as well during the Q2 Earnings Call. Megapack has continued to help the company integrate grid-tied storage in rapidly.
The interesting thing is, there are a lot of people who look at Tesla as an ‚Äúautomaker‚ÄĚ and not as a technology company or an energy solutions company. People only look at their cars as their business, and to be honest, it‚Äôs kind of disappointing that people don‚Äôt realize that they have a world-class energy business that also offers sustainable alternatives.
Ultimately, Tesla has a lot of potential in energy, and the value of the company‚Äôs stock could be even more than what it already is. Many TSLA bulls believe that there is a limitless possibility for the company‚Äôs stock price. Some believe $2k; others believe $10k. Whatever you believe, do you think that the energy side of the company should be more involved in analyst evaluations?
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.