If you read our previous article reasoning that Apple Inc. (APPL) should Buy Tesla, it should not surprise you that Tesla intends to begin production on a battery for the home.
Speaking to investors, Tesla Motors Inc. (TSLA) Chief Technology Officer JB Straubel said his company plans to unveil consumer batteries that will power a person's home or business "fairly soon." He went on to say that it's possible the product could be unveiled "in the next month or two" and that production on the batteries will begin in approximately six months.
Elon Musk is positioning Tesla for as wide a swath as he can cast. I have always believed it was easier for him to raise money with a sexy car than it would have been to sell the idea to make a battery for your home or business.
Elon Musk: A Man and his Dream
If you know Elon like I know Elon, then you will know he is a modern day Jeff Bridges selling Tucker Autos to America in a great movie called Tucker: The Man and his Dreams (1988). In the movie, Tucker fought hard against the auto giants and was advised by Howard Hughes as he took a ramshackle crew and made cars in his garage, and I think much of the public views Musk as an underdog who is making electric cars in his garage.
Musk is great in the underdog role, be he is as successful an entrepreneur as we have seen this generation. You have Steve Jobsand the Google Inc. (GOOG) boys (Sergy and Larry), and Mark Zuckerberg, but Musk has a larger vision. Whereas the aforementioned all did one thing well, Musk is on the brink of doing many things well. With all due respect, Jobs made the iSeries, Google made Search, and Zuckerberg made “The Facebook," (Facebook Inc. (FB) ). But Elon (before it’s all said and done) will impact the electric car, solar power for the consumer, space flight and Paypal. Elon has a head that seems to be exploding out of that huge vein on his brow.
Tesla is not about cars. Although I think they will sell many cars before he sells the company, I think the shares are too expensive at these prices ($25B market-cap), and a selloff needs to happen before anyone pays $25 billion.
The road to execution and auto production is rife with problems. This was demonstrated by the recent sales team swap in China and leadership change already at Tesla. No CEO in his right mind can pay $25B at the moment. They are better off letting Elon suffer through the pain of the next two years – it will be a similar price anyway. I don’t think Tesla is ever going to match the value of Apple – unless it is owned by Apple.
So don’t be surprised by Elon Musk. In the not-too-distant future, you can expect that he will be driving his electric car in space, running on solar power, and paying for it all on his iPhone via Paypal.
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