For as much news coverage as Elon Musk's Tesla Motors receives for its electric cars, the company does its business in a section of the auto world that has a tiny market share (0.6 percent in the U.S.). Furthermore, the price point of Tesla's flagship Model S isn't exactly attainable for a majority of Americans.
Recently, after not meeting financial targets and considering the lower price of oil, commentators and analysts in the stock world have had harsh and pessimistic words for the Palo Alto, California, company. To add insult to injury, reports indicate that Apple and its incredible $178 billion cash-on-hand will enter the electric car market.
Yet, Musk is undaunted and believes Tesla can reach a level on par with Apple's $700 billion market capitalization within 10 years. Right now, its value is approximately $27 billion, according to MarketWatch.
To get to such a massive size, Tesla probably needs to expand beyond predominately being an automaker. In announcing a battery to power homes and businesses during a recent disappointing earnings call, Musk may have one of the things his company needs to reach those astronomical heights.
Not a whole lot is known about the specifics of the battery, its scope and whether it will be able to take homes off the power grid. However, with Tesla's autos powered by lithium-ion batteries like the ones that will be sold for home usage, the new product is a natural extension of technology Tesla already has. It's also a new use for the company's $5 billion Gigafactory currently under construction outside Reno, Nevada.
Musk expects the home battery to start production in about six months, and a product unveil in about one to two months.
Another aspect of the move into powering the home concerns SolarCity, a company run by Musk's cousin, with Musk himself on the board. According to The Verge, "SolarCity installs panels on people's roofs, leases them for less than they'd be paying in energy bills, and sells surplus energy back to the local utility." SolarCity also controls 39 percent of the residential solar market as of December 2014.
With a Tesla home battery potentially threatening to take residences and small businesses off the power grid, traditional utilities may view the new product as a threat to their existence. But the truth might not be so ominous.
"I read a lot of articles about Elon Musk versus the utility companies. I don't see it that way at all. There is a natural partnership that can exist there," John Shipman of Consolidated Edison Co. in New York told Bloomberg in December.
Some utilities, especially in California, are investing in technology like charging stations for cars like Tesla. Presumably, utilities could also use the necessity for people to charge their home batteries as a business opportunity as well.
There is, of course, the other side of the coin, where utilities throw up both financial and legal roadblocks to solar power and taking a home or business off the grid. In Arizona, the dominant power company added a $5 monthly fee to the bills of residents with solar systems. And in Florida and Texas, members of some communities have been arrested for not being connected to a power grid.
It's possible that, at least for now, Tesla's new battery will be something analogous to its cars: expensive and of limited quantity, yet influential and possibly a game-changer for an entire industry.
