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O’Donnel Says Tesla Motors Inc (TSLA)’s Home Battery Will Not Be a Game-Changer

In a tweet yesterday, Elon Musk, CEO of Tesla Motors Inc (NASDAQ:TSLA) hinted that he would be unveiling Tesla’s new product line on April 30, at the Tesla Design Studio in Hawthorne, CA. Although Musk has not shared any other details about this new product in his tweet, experts argue that this different product will likely be the home battery which Musk had earlier pointed to some time ago. The idea is for consumers to store electricity in a large battery from the grid and then use it to power their Tesla Motors Inc cars or even their homes. So, if Tesla Motors Inc’s new product is indeed a home battery product, in what way can it affect Tesla Motors Inc’s revenue streams? To talk about this, CNBC interviewed the Senior Technology Analyst and CEO of TECHnalysis, Bob O’Donnel.

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“First of all, I have to wonder what kind of reactions are going to be from utility companies here in the U.S., and of course in other parts of the world where you have some of the same challenges. But, you know, when you’re talking about taking electricity off of the grid, that’s a little bit different. I mean, people have solar power, some people have batteries in place, and theoretically this could work with those. But, it’s not to me a large enough market that’s going to dramatically change things. There will be a lot of questions about how expensive it is. At the same time what they want to do is leverage the huge battery factory that they’re going to be building. They want to diverse by themselves, not be completely focused on the car. This is an obvious expansion to leverage that big manufacturing investment in large batteries,” O’Donnel said.

Musk’s teaser about the new Tesla Motors Inc (NASDAQ:TSLA) product line did result in a short term rise of 3% in Tesla’s stock yesterday, but according to O’Donnel it does not change the script in the longer term. The tweet is more something that Musk has done to trump up the home battery (if indeed that’s what it is) to get consumers and investors to look forward to this product.

“I think it is one of those things that will be of interest to some number of Tesla owners, to some number of people who perhaps want to try and slightly live off the electricity grid a bit, and for people who are into doing solar power. But I think there could be some interesting challenges in terms of how it works with the existing utilities, if there’s any challenges […]. So, it’s going to be interesting to watch and of course price point is going to be a big question too,” O’Donnel said.

The proof of the pudding is really always in the eating and we must wait and see if what glitters is gold. As Tesla Motors Inc (NASDAQ:TSLA) is looking to leverage its large investment in the manufacturing of these batteries, the real game-changer will not be the battery itself but the sum of money that it would cost consumers to buy these batteries.

Disclosure: None

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