After several years focused on building the best and safest car on the market, Tesla Motors Inc (NASDAQ:TSLA) could be getting ready to explore alternative revenue streams that traditional car companies could only dream of.
Silicon Valley companies are well known for their success in business model innovation. LinkedIn Corp (NYSE:LNKD), for instance, has surprised investors by smashing earnings estimates due to the successful development and execution of alternative revenue streams that were developed only recently.
Tesla could develop three potential revenue sources over the years by leveraging the foundations of its amazing technology platform. The viability of these business model initiatives will, of course, depend on Tesla’s successful execution of its long-term plans of becoming a mass-market car manufacturer and building out its network of charging stations throughout the world.
Battery swaps Analyst Trip Chowdhry of Global Equities Research is bullish on Tesla’s unveiling of its new 90-second battery swap stations, which the company expects to role out later this year.
In a research note, the analyst explains that the battery swap service creates an asymmetric revenue stream for the company. Swaps will cost $50-$80, which is equivalent to the cost of filling up a 15-gallon gas tank. "We estimate TSLA margins on Battery Swap Stations could north of 60%," Chowdhry states.
The analyst notes that the idea of swapping stations is just one of multiple revenue streams that may emerge from Tesla. Chowdhry believes that the news aligns with the view that Tesla is leading the $100 billion "transport-as-a-service" industry.
Advertising Each Tesla vehicle is equipped with a 17-inch screen in the center console that has Internet connectivity and an easy to use web browser. Tesla could easily follow in the footsteps of the Mozilla foundation and sign a deal with Google Inc (NASDAQ:GOOG) or Bing that grants the search giant the right to become the default search provider for the in-car web browser. The Mozilla foundation signed a $1 billion dollar deal with Google in 2011 that granted Google a few more years as the default search provider on the popular Firefox browser.