Very nice. So Barons holds about 1M shares.
Interesting that in 1910 electricity was more expensive than gas. I suspect this was because the electrical grid was not built up and paid for at that time. Moreover, if gas is cheaper than electricity, then you could potentially do better buy buying a gas generator and making power locally. Of course this assumes you could buy a gas generator at a reasonable price. In either case, guys like Ford could make money putting ICE in either cars or stationary for electricity. Sound familiar? Fast forward to today and modern grids are much more efficient than ICE. Electricity is about a quarter the cost of gas on a delivered power basis. So Tesla with its battery packs can make money both in cars and stationary applications.
At a fundamental level, Tesla is an arbitrage play. There are essentially two different energy markets: electricity and transportation fuels markets. While there is some overlap such as heating oil competing with NG and electricity and NG in transportation, that overlap is not enough to close the price gap between oil and electricity. For example, in this country oil is about 3 to 4 times as expensive as NG on a per unit energy basis. This price gap create a huge potential for arbitrage. Tesla is creating an attractive product with compelling technology that brings cheap electricity into the transportation fuel market. So long as oil is more expensive than electricity, Tesla will be able to tap this arbitrage opportunity. Basically the price of oil needs to drop to about $25/bbl to close this gap, a price level well below that which would put all fracking and deep water production out of business. I suspect that Saudi Arabia understands this threat. For them, curtailing production today means more stranded assets in 20 years. They need to sell oil like its going out of style because it is. The only way for the Saudis to divest is to maximize production today so long as fracker keep drilling for oil.
This is why the most important thing for Tesla to do today is to accelerate the Gigafactory. Whether the Model X comes out any time next year or annual sales are less than 33k this year, really does not matter to the fundamental economic opportunity before them. Cheap battery packs will arb the hell out of oil.
