Tesla set for big push into battery market

Tesla Motors is preparing to unveil its push into the battery and energy storage business at a big event in Southern California tonight, an unveiling that has sparked interest on Wall Street and from green energy watchers alike.

“This is a significant opportunity for Tesla and clearly there seems to be a market for stationary energy storage in a number of applications,” said Rod Lache, an analyst with Deutsche Bank Research, an investment firm.

The products that are slated to be unveiled tonight are residential-scale batteries for home use and commercial-scale batteries for utilities.

“The applications could include home storage, or the electricity grid,” Lache said.

On Twitter this week, Elon Musk, Tesla’s chief executive officer, touted the upcoming announcement.

“For the future to be good, we need electric transport, solar power, and, of course, the Missing Piece,” Musk tweeted.

That missing piece is expected to be battery products to broaden the company’s offerings.

It makes sense for Tesla to push into the new arena, said Tom Foremski, editor of Silicon Valley Watcher.

“Tesla will benefit by opening up the battery markets,” Foremski said. “If they can reduce the costs of deploying their technology, because they are entering the consumer battery market, that really helps by pushing down the overall costs per unit. It supports Tesla’s business model to create an even greater market for batteries. In a lot of ways, batteries are the crown jewels for Tesla.”

Batteries for home use also are a crucial piece of the puzzle for the emerging solar energy sector. Besides leading Tesla, Musk also happens to be chairman of SolarCity.

Users of home solar seek a stable electricity supply at night or on cloudy days, so a home battery system would be a benefit.

“With more rooftops holding solar, this effort makes sense,” Foremski said.

CEO Elon Musk, center, with CTO J.B. Straubel, left, and Chief Designer Franz von Holzhausen watch as Tesla launched the Model S, at its factory in Fremont on June 22, 2012. (Patrick Tehan/Mercury News)

 

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