Tesla Redoubles is trying to expand its energy company in 2019


Published on April 26, 2019 |

by Kyle Field

26. April 2019 by Kyle Field

Tesla Pushing To Ramp Up his Solar + Storage Business in 2019

Elon Musk committed to ramp up Tesla's efforts to expand its energy businesses on both energy storage and the sunny side of the equation on the company's first quarter 2019 investor call earlier this week.

The vision all the time for Tesla was that it would build a robust range of electric vehicles supported by energy storage and solar power generation that can deliver and store renewable electricity. Tesla's solar industry has continued to lose stock in the housing market, and the company has been struggling over the past few years to acquire enough battery capacity production capacity to really throw up its home magazine and larger Powerpack energy storage products. Its solar business has lost a significant share from its days as SolarCity, where the company had a 33.5% share of the solar heating market, compared to 9.1% today.

The decline in solar installations continues even today, as Tesla noted that energy storage and generation revenues in the first quarter of this year were reduced by 13% compared to the fourth quarter of 2018, driven by a sharp decline in solar energy.

Tesla Energy Storage

On the earnings call Q1 2019, Musk became slightly aware of the reasons for the lack of availability of Tesla's energy storage products and their plans to ramp up the entire series of Tesla Energy products in 2019. So far, Tesla has had to withdraw all the stops in battery cell production just to keep the automotive industry on track, said Musk. This should not come as any surprise to anyone who followed the huge battles Tesla had with the Model 3 production ramp, which occurred parallel to several extensions at Gigafactory 1.

Musk shared that they planned to use 5 – 10% of Tesla's production of battery sources for energy storage products, said it is much easier to build Powerwalls and Powerpacks because there are far fewer cells in them compared to Tesla's vehicles. Elon said he expects "something in the order of 300%" growth in Tesla's energy storage business this year as a result of increased focus.

Tesla started the Gigafactory 1 cell production routing back to the energy storage products in Q1 2019, which translated into a 30% increase in the production of Tesla's energy storage products in Q1 2019 against Q4 2018.

Solar Roof Tiles

Tesla Solar Roof Tiles also spent some time focusing on the earnings call, which Musk talked about a new "version 3" of the ceiling tile product and said the company wants to scale production significantly.

Maxwell Technologies

The future of Tesla's energy storage could not be found in lithium-ion batteries, but in super-capacity batteries, thanks to the proposed agreement between Tesla and Maxwell Technologies. Tesla made a proposal to all shareholders of Maxwell Technologies to offer the purchase of all outstanding shares on the stock and it has extended the offer timeline several times. Most recently, Tesla expanded its decision window to May 15, 2019 at 11:59 am.

Tesla makes a takeover bid to Maxwell Technologies is a potential sign that Tesla is planning to move beyond lithium ion batteries and their current 300,000 to 500,000 million expected life expectancy to a newer energy storage architecture that would enable the 1,000,000 mile package life as Elon Musk mentioned at the Tesla Autonomy Investor Day event earlier this week.

Maxwell's investor deck marked the fact that its dry electrodes have the potential to increase the life of the batteries "up to 2x", which is convenient to Tesla's next-generation battery pack. Building batteries and vehicles that last much longer is a fundamental component of Tesla's strategy to build all its vehicles to serve double duty as a robot ax.

Maxwell's dry battery electrodes hold the potential to increase the energy density of Tesla's energy storage products more than 50%. This will allow Tesla to increase its reach without increasing the storage capacity of its packages by cutting the weight of future packages.

An alternative theory of potential Maxwell acquisition is that Tesla is not interested in chemistry enhancement, but only Maxwell's manufacturing process improvements. The idea is that the real advantage for Tesla is to reduce production costs through a more efficient production process.

In response to a question about integrating Maxwell's technology into Tesla's products, Elon seemed to add another element to his mental rendering list. "We will probably have an investor day later this year or early next to going over cell and battery technology and future strategy, and it will be very informative," he said. "We recognize the criticism of this."

Tags: Elon Musk, Tesla, Tesla Energy, Tesla Gigafactories, Tesla Gigafactory 1, Tesla Powerpack, Tesla Powerwall, Tesla solar, Tesla Solar roof tiles

About the author

Kyle Field I am a tech geek passionate looking for real ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live on purpose, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. TSLA investor.

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