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发帖数: 2469 | 1 Solar and Storage Will Eventually Be Positive for Tesla and TSLA Stock
InvestorPlace
James Brumley
,InvestorPlace•August 5, 2019
Never let it be said that Tesla (NASDAQ:TSLA) doesn’t keep things
interesting. Investors, whether they own TSLA stock or not, love to debate
the merits of letting a relatively reckless visionary like Elon Musk remain
at the helm of TSLA.
Tesla's (TSLA) Energy Businesses Could eventually Boost TSLA Stock
Tesla's (TSLA) Energy Businesses Could eventually Boost TSLA Stock
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Source: Shutterstock
Following last month’s release of a relatively disappointing second-quarter
report by TSLA, though, the prevailing discussion is once again shifting
away from the company’s battery-powered cars and to its struggling energy
arm.
10 Generation Z Stocks to Buy Long
Most observers appreciate the company’s efforts in the energy sector, but
many critics question whether TSLA should be in the business at all. The
unit doesn’t affect the organization’s results much right now, and more
established solar names like SunPower (NASDAQ:SPWR) and SunRun (NASDAQ:RUN)
seem far better positioned to connect with consumers.
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Those doubters may well be right. But Elon Musk’s solar panel business and
its closely-related battery/ energy-storage business are long-term project
that are arguably just a few years ahead of their time.
At least TSLA will be ready when solar and storage really take off,
assuming it survives its electric-vehicle production ramp-up.
Would TSLA Be Better Off Without Energy?
At the heart of investors’ frustration with the minimal catalyst Tesla’s
solar and power storage business has offered thus far is 2016’s
questionable purchase of SolarCity. Factoring in SolarCity’s debt, Tesla
effectively paid on the order of $5 billion for a company that, at the time,
was generating around $500 million of annual revenue.
How much solar panel business Tesla is doing now isn’t perfectly clear.
SolarCity’s operation was folded into what is now categorized as energy
generation and storage revenue, which includes sales of Tesla’s Powerwall
for consumers and bigger Powerpacks for large organizations. The recently-
introduced Megapack will appeal to utility companies, as it stores one
gigawatt-hour’s worth of energy.
As it stands right now, however, the company’s energy-production and
storage arm is relatively small and shrinking. That unit produced $368
million worth of sales during the second quarter, versus $5.4 billion in
electric-vehicle revenue. Sales of solar panels and roofs fell 38% during Q1
, year-over-year, and were off by 65% in Q2, Total energy revenues were off
just a bit last quarter as well.
Meanwhile, EV gross margins are improving, coming in at 18.9% last quarter.
By contrast, the margins of the company’s energy-related products were
only 11.6%.
The numbers inspire doubts about the company’s solar business. As Joe Osha,
analyst with JMP Securities, noted of the company’s energy arm “They’re
just barely in the solar game. This business requires capital and focus, and
at this point it’s not even clear who’s running it. They’d just be
better off shutting the solar business down. It’s a distraction.”
He’s not alone in his view.
Elon Musk’s Vision
Musk’s bold vision has at times spurred ill-advised decisions. The company
’s energy-related unit hasn’t been immune to his aggressive growth
approach.
The foray into the solar -panel business with the acquisition of SolarCity
was also a case of unfortunate timing. In 2016, the growth of U.S. solar
installations slowed to only 16%, versus an average of 63% in the three
years prior. In 2018, the market shrank by 2%, as U.S. government subsidies
all but vanished.
It wasn’t the commercial potential of solar power — and the storage of it
— that Musk was naive about, however. His failing, if there was one, was in
determining how consumers and corporations would want to purchase solar
panels, and when they’d be comfortable enough to do so without hand-holding.
Musk’s overarching vision has never just been about electric cars. It was
always about moving the world in a green, carbon-free direction. Solar is
the simplest and most effective means to that end. EVs were simply a way to
get the ball rolling. |
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