Thanks, that's what I actually meant(writing that post right after conference call)... Half of the power plants are seemingly all peaker plants. The interesting thing is Elon said at utility conference that powerpack can literally fit at presumably all substations right now in a nearly plug and play situation. That is astonishing and quite shocking to many utilities. I think there is a lot of back room discussions going on at investor owned utitlity board rooms right now how they can do this. Unfortunately, many are just too far down the line on future natural gas investments they are more inclined to try and stall tesla momentum then accept them. However, this provides big oportunities for other utitlies to invest in powerpack full tilt. I think we'll see big investments in New York and Hawaii very soon. California as well. Surprisingly, I feel some utitlies in Texas will also be among the first. It's funny how net metering is not policy in Texas, but Solarcity has a partnership under net metering model with a Texas utility. So, I think good business is good business and we may well witness massive shift toward powerpack (and DG) as soon as 2016.
-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Thanks, that's what I actually meant(writing that post right after conference call)... Half of the power plants are seemingly all peaker plants. The interesting thing is Elon said at utility conference that powerpack can literally fit at presumably all substations right now in a nearly plug and play situation. That is astonishing and quite shocking to many utilities. I think there is a lot of back room discussions going on at investor owned utitlity board rooms right now how they can do this. Unfortunately, many are just too far down the line on future natural gas investments they are more inclined to try and stall tesla momentum then accept them. However, this provides big oportunities for other utitlies to invest in powerpack full tilt. I think we'll see big investments in New York and Hawaii very soon. California as well. Surprisingly, I feel some utitlies in Texas will also be among the first. It's funny how net metering is not policy in Texas, but Solarcity has a partnership under net metering model with a Texas utility. So, I think good business is good business and we may well witness massive shift toward powerpack (and DG) as soon as 2016.
jhm
Well-Known Member
I'm glad you guys resolved the question of how batteries shut down half of the fossil generation capacity without even accounting for wind and solar. The basic observation is that the globe has 6 TW of beneration capacity and generates about 60 TWh per day. That's just 10 hours per day of utilization. With sufficient batteries the least efficient generators (mostly peakers) can be shut down while the most efficient generators run 20 or more hours per day. That knocks out about 3 TW of capacity.
The next kick in the pants for the remaining 3 TW is the continued intrusion of renewable energy. With sufficient battery storage solar and wind become fully dispatchable. So every TWh that solar and wind produces in a day offsets the need to spend fuel generating a TWh of electricity in the 3 GW thermal fleet. Year after year more solar and wind are added, which displaces more and more fuel that would otherwise be spent. So demand for fossil fuels within electricity markets falls as quickly as renewables can be added to the mix. This reduces fossil fuels to playing a niche role to balance out seasonal and emergency backup gaps in renewables.
Another thing to understand about fully dispactable renewable energy displacing fossil fuels is that the price of renewable energy will put a cap on the price for natural gas and coal. Combined cycle natural gas generation has a levelized cost in range of $61/MWh. But we see that utility scale solar and wind are approaching $39 and $25 per MWh respectively, and these costs will continue to fall. So as the inclusion of batteries effectively makes solar and wind fully dispatchable, there is little to protect CCNG and coal from direct competition with lower cost renewables. That is, natural gas will have to fall enough that the levelized cost of CCNG generators drop below $40/MWh. So over time the price of natural gas must fall another 50%. Demand will dry up for any significant market above that half price. Note that the price of natural gas and coal have fallen about 75% in the last 5 years, and I figure that it must keep falling another 50% over the next 5 years. I believe this squeeze of fossil fuels is also what has been driving down demand for crude. Petroleum fuels used in generation power and heating are taking a beating by natural gas. WhIle this may not seem like a huge share of the barrel, demand for crude historically grows at less than 2% annually. So disrupting smaller markets for oil products and modest increases in fuel efficiency can kill off sufficient demand to halt growth. So we see the oil producers struggling to hold onto market share in the face of declining demand. Batteries will enable renewables to better compete with natural gas, which in turn will continue to force out oil and coal. Oil continues to have a huge advantage in transportation, which is why the price of crude has only lost 50% in the last 5 years, but of course batteries are key to disrupting transportation fuels.
So my view of fossil generation in the next ten years is quite bleak. I don't see how anyone will be able to make money in that business. This means the utilities must get out of the power generation business. They need to locate themselves elsewhere in the power supply chain. This will be a radical shift grommets generation as a profit center to service and distribution as a profit center. Buying into batteries could give utilities what they need to survive this transition. But what if they refuse to take that way out? Suppose they think they can forestall the collapse of the generation business by resisting batteries just as they resist distributed solar. I belive some will take this tact, but it will be a disaster. Basically, if the utilities do not load up on batteries, their customers will. This is the option of mass load defection. The economics of distributed solar and batteries will continue to improve while the battery resistant lose massive market share. Moreover, these utilities become vulnerable to DG strikes, for example a coordinated effort to charge batteries at times of peak wholesale power prices to force a utility to buy power at a loss, and other political decay. If utilities allow ratepayers to get the upper hand on batteries, ratepayers will have greater ability to manipulate the grid than the utilities, and utilities will be forced to pay for aggregated services. So from a purely strategic point of view, I think the utilities cannot afford to let ratepayers get more storage than them. So utilities must buy more Powerpacks than ratepayers buy Powerwalls. It's a veritable arms race, and we'll be able to see who's winning just by observing the split of packs versus walls.
The next kick in the pants for the remaining 3 TW is the continued intrusion of renewable energy. With sufficient battery storage solar and wind become fully dispatchable. So every TWh that solar and wind produces in a day offsets the need to spend fuel generating a TWh of electricity in the 3 GW thermal fleet. Year after year more solar and wind are added, which displaces more and more fuel that would otherwise be spent. So demand for fossil fuels within electricity markets falls as quickly as renewables can be added to the mix. This reduces fossil fuels to playing a niche role to balance out seasonal and emergency backup gaps in renewables.
Another thing to understand about fully dispactable renewable energy displacing fossil fuels is that the price of renewable energy will put a cap on the price for natural gas and coal. Combined cycle natural gas generation has a levelized cost in range of $61/MWh. But we see that utility scale solar and wind are approaching $39 and $25 per MWh respectively, and these costs will continue to fall. So as the inclusion of batteries effectively makes solar and wind fully dispatchable, there is little to protect CCNG and coal from direct competition with lower cost renewables. That is, natural gas will have to fall enough that the levelized cost of CCNG generators drop below $40/MWh. So over time the price of natural gas must fall another 50%. Demand will dry up for any significant market above that half price. Note that the price of natural gas and coal have fallen about 75% in the last 5 years, and I figure that it must keep falling another 50% over the next 5 years. I believe this squeeze of fossil fuels is also what has been driving down demand for crude. Petroleum fuels used in generation power and heating are taking a beating by natural gas. WhIle this may not seem like a huge share of the barrel, demand for crude historically grows at less than 2% annually. So disrupting smaller markets for oil products and modest increases in fuel efficiency can kill off sufficient demand to halt growth. So we see the oil producers struggling to hold onto market share in the face of declining demand. Batteries will enable renewables to better compete with natural gas, which in turn will continue to force out oil and coal. Oil continues to have a huge advantage in transportation, which is why the price of crude has only lost 50% in the last 5 years, but of course batteries are key to disrupting transportation fuels.
So my view of fossil generation in the next ten years is quite bleak. I don't see how anyone will be able to make money in that business. This means the utilities must get out of the power generation business. They need to locate themselves elsewhere in the power supply chain. This will be a radical shift grommets generation as a profit center to service and distribution as a profit center. Buying into batteries could give utilities what they need to survive this transition. But what if they refuse to take that way out? Suppose they think they can forestall the collapse of the generation business by resisting batteries just as they resist distributed solar. I belive some will take this tact, but it will be a disaster. Basically, if the utilities do not load up on batteries, their customers will. This is the option of mass load defection. The economics of distributed solar and batteries will continue to improve while the battery resistant lose massive market share. Moreover, these utilities become vulnerable to DG strikes, for example a coordinated effort to charge batteries at times of peak wholesale power prices to force a utility to buy power at a loss, and other political decay. If utilities allow ratepayers to get the upper hand on batteries, ratepayers will have greater ability to manipulate the grid than the utilities, and utilities will be forced to pay for aggregated services. So from a purely strategic point of view, I think the utilities cannot afford to let ratepayers get more storage than them. So utilities must buy more Powerpacks than ratepayers buy Powerwalls. It's a veritable arms race, and we'll be able to see who's winning just by observing the split of packs versus walls.
The point is you won't build new peaker plants. You will create a distributed battery storage "environment" out at sites around the country. A peaker plant may take up say 50 acres. While batteries installed at businesses, college campuses, factories and more can act as the peaker plant - and signaled by regulation signal for output (ie. "generation") should there be a call for raised output. Islanding a hospital or university on their own power generation capacity has also been done during peak loads. One further benefit is that some standby-tubes at a hydro plant can be kept shut instead of opening during peak load periods - thus saving some hydro resources from flowing downstream. Critical in areas like California and other western locations. But the other issue is "who pays for the battery storage"? Should it be taxpayers or the rate-payer? We all pay for the peaker plant through the market forces of energy generation wholesale and distribution. But when a battery system is installed at a university, should we really be paying for that if primarily the benefactor is that university and their ability to lower their peak demand rates paid to the utility? The same benefit occurs when they draw less from the grid and thus our energy company doesn't need to pay the peak-demand market rates (up to a few hundred per MWh on the spot market, at times). Distributed power storage means distributed benefit and less of a community-common system.
Once cheap enough, energy distribution companies (who buy power from regulated market generators) will buy their own battery subsystems and be able to manage their costs better - this also helps all rate payers due to the lessened need to pay-through to the higher-cost peaker plant generators.
Once cheap enough, energy distribution companies (who buy power from regulated market generators) will buy their own battery subsystems and be able to manage their costs better - this also helps all rate payers due to the lessened need to pay-through to the higher-cost peaker plant generators.
jhm
Well-Known Member
Bonaire, I'm right with you on this. I think the cost storage will actually be far less than most would expect. Five reasons why: They can be widely distributed everywhere power is used or made and thus minimize the cost of locating. They produce the auxiliary benefit of backup power, so certain users are willing to pay more than the rate arbitrage value of battery for installation. While distributed geographically, they can be aggregated through the internet, so coordination provides operational efficiency and added revenue streams for those paying to install. Distributed batteries can reduce transmission and distribution costs to the grid, and should be compensated for distributional efficiencies they create. And finally, they are modular and can be redeployed for one location where the return may be low to another where the return is low. This substantially de-risks the investment. Just install and redeploy as needed to optimize. By contrast, a gas peaker plant is a long-term investment, with tight sighting limitations, does not all users to pay for backup benefit, and cannot be redeployed should the investment prove suboptimal. So basically batteries can dance circles around peakers.
It's a little bit like the competition between truckers and railroads. Rail carriers can provide cheap bulk shipping of goods. But trucks are much quicker, more nimble, even if they cost a little more. The breakdown of this analogy is that batteries will be both cheaper and more nimble. The key problem is that production of batteries has yet to scale up.
Whether you like that analogy or not, the key point that I would like to make is that the price storage will be offered to the grid could easily be very close to the cost of the battery. For example a Powerpack at $250/kWh with nominal 5000 cycle life works out to a evelized battery cost of just $50/MWh. Now what about all the other costs of siting, installation, inverters, maintenance, taxes, insurance, etc, and profit? Would anyone actually offer storage to the grid at a price of just $50/MWh, or would it get grossed up to say $100/MWh? I actually think the price of storage will go quite close to the battery cost. Why? Because the most economically efficient locations for batteries will take advantage of smart co-location (like using an existing substation), leverage existing power electronics (such as using the same inverter as solar panels), provide added value such as backup power to owners, and aggregation services will provide multiple streams of revenue (such as voltage regulation in addition to storage). So if batteries are finding all sorts of ways to minimize incremental cost and add value wherever they may be distributed, this goes a long ways in covering the non-battery costs of selling storage to the grid. So my view is that as a sophisticated storage aggregation market emerges, the price of storage offered to the grid will be quite close to the cost of the batteries alone.
Why this matters is that the price of storage offered to the grid places an arbitrage bound on the range of daily prices in the spot market. So if there is sufficient wind and solar to drive the spot price down to say $20/MWh and the price of storage is $50/MWh, then spot prices are bound above by $70/MWh for the next 24 hours or so. Thus, the price of storage does two very important things: it prices expensive peak power out of the market, and it provides a floor price for wind and solar. Only those generators which can turn a profit in a market bounded between $20 and $70 per MWh will be economically relevant going forward. This is really bad news for most fossil fleet operators, but very good news for renewable energy and batteries.
It's a little bit like the competition between truckers and railroads. Rail carriers can provide cheap bulk shipping of goods. But trucks are much quicker, more nimble, even if they cost a little more. The breakdown of this analogy is that batteries will be both cheaper and more nimble. The key problem is that production of batteries has yet to scale up.
Whether you like that analogy or not, the key point that I would like to make is that the price storage will be offered to the grid could easily be very close to the cost of the battery. For example a Powerpack at $250/kWh with nominal 5000 cycle life works out to a evelized battery cost of just $50/MWh. Now what about all the other costs of siting, installation, inverters, maintenance, taxes, insurance, etc, and profit? Would anyone actually offer storage to the grid at a price of just $50/MWh, or would it get grossed up to say $100/MWh? I actually think the price of storage will go quite close to the battery cost. Why? Because the most economically efficient locations for batteries will take advantage of smart co-location (like using an existing substation), leverage existing power electronics (such as using the same inverter as solar panels), provide added value such as backup power to owners, and aggregation services will provide multiple streams of revenue (such as voltage regulation in addition to storage). So if batteries are finding all sorts of ways to minimize incremental cost and add value wherever they may be distributed, this goes a long ways in covering the non-battery costs of selling storage to the grid. So my view is that as a sophisticated storage aggregation market emerges, the price of storage offered to the grid will be quite close to the cost of the batteries alone.
Why this matters is that the price of storage offered to the grid places an arbitrage bound on the range of daily prices in the spot market. So if there is sufficient wind and solar to drive the spot price down to say $20/MWh and the price of storage is $50/MWh, then spot prices are bound above by $70/MWh for the next 24 hours or so. Thus, the price of storage does two very important things: it prices expensive peak power out of the market, and it provides a floor price for wind and solar. Only those generators which can turn a profit in a market bounded between $20 and $70 per MWh will be economically relevant going forward. This is really bad news for most fossil fleet operators, but very good news for renewable energy and batteries.
I always want to add in the demand must actually be addressed and hopefully lowered through a concerted effort. Whether it is institutions moving to lesser-demanding lighting (LED over incandescent) which itself can lead to less A.C. load in buildings and in turn less demand, use of more LED televisions over CRT types or just general deployment of Solar PV.
Remember years ago when the big calling card of Solar PV salesmen was "the reasons for all the incentives of the states and federal tax credits for Solar PV are to cut the need for peaker plants". It was a line said to me in 2010 when two installers were talking with me about doing a project. I waited two more years to do it with another local installer who I contacted and wasn't trying to be "sold to". Since Solar PV itself was "supposed to" help cut the demand for peaker plants but has not really done that, now we look to batteries as a way to avoid peaker plants. The combination is needed, actually and not just one or the other. Hundreds of GWhs of batteries alone can help a bit by charging at night off of baseload plants and dumping during the peak hours. However, FERC-regulated regional operators still need to rely on some level of peaker plants and synchronous standby until the regulations change. Even if they are never called upon, the grid relies on synchronous standby being ready in case a plant needs an emergency shutdown action (ie. nuclear plant trouble-alarms going off would be one). With many dozens of GWh of batteries out there, there is still the unknown of how long the baseload plant will be down for and could other baseload be brought online quick enough to not use-up any regulated aggregated battery ecosystem. The grid is designed around the worst-case conditions and blackouts and black-starts are something they really need to avoid at almost "all costs".
Trimming the "peak load" has sort-of happened in many ways "by attrition". This attrition has been a lot of this nation's factory operations ceasing where the thousands of factories and millions of jobs have gone overseas. In turn, it has not come back directly but indirectly through things like new home construction, vacation homes kept cool (even if vacant) with their AC load (including homes bought by overseas interests) and general growth of the US population. I've heard that there are possibly 10 Million surplus homes in the USA (ie. vacant or part-time use). I know of numerous within 2 miles of my home. And at the same time, the growth of the Solar PV industry has kept demand down in some ways during mid day to mid-afternoons. But peak load is still "the problem" and in places like California, that is 5pm through 9pm. Solar isn't cutting it for that window except a small benefit from West-facing arrays and tracker systems allowing for late day solar generation. But throw in a hot, muggy day and a weather front moving in with clouds and all of that solar pv benefit is lost for that day and the outlier condition occurs.
Remember years ago when the big calling card of Solar PV salesmen was "the reasons for all the incentives of the states and federal tax credits for Solar PV are to cut the need for peaker plants". It was a line said to me in 2010 when two installers were talking with me about doing a project. I waited two more years to do it with another local installer who I contacted and wasn't trying to be "sold to". Since Solar PV itself was "supposed to" help cut the demand for peaker plants but has not really done that, now we look to batteries as a way to avoid peaker plants. The combination is needed, actually and not just one or the other. Hundreds of GWhs of batteries alone can help a bit by charging at night off of baseload plants and dumping during the peak hours. However, FERC-regulated regional operators still need to rely on some level of peaker plants and synchronous standby until the regulations change. Even if they are never called upon, the grid relies on synchronous standby being ready in case a plant needs an emergency shutdown action (ie. nuclear plant trouble-alarms going off would be one). With many dozens of GWh of batteries out there, there is still the unknown of how long the baseload plant will be down for and could other baseload be brought online quick enough to not use-up any regulated aggregated battery ecosystem. The grid is designed around the worst-case conditions and blackouts and black-starts are something they really need to avoid at almost "all costs".
Trimming the "peak load" has sort-of happened in many ways "by attrition". This attrition has been a lot of this nation's factory operations ceasing where the thousands of factories and millions of jobs have gone overseas. In turn, it has not come back directly but indirectly through things like new home construction, vacation homes kept cool (even if vacant) with their AC load (including homes bought by overseas interests) and general growth of the US population. I've heard that there are possibly 10 Million surplus homes in the USA (ie. vacant or part-time use). I know of numerous within 2 miles of my home. And at the same time, the growth of the Solar PV industry has kept demand down in some ways during mid day to mid-afternoons. But peak load is still "the problem" and in places like California, that is 5pm through 9pm. Solar isn't cutting it for that window except a small benefit from West-facing arrays and tracker systems allowing for late day solar generation. But throw in a hot, muggy day and a weather front moving in with clouds and all of that solar pv benefit is lost for that day and the outlier condition occurs.
jhm
Well-Known Member
I'm trying to remember what the capacity standby fee in California was. I think is was something like $190/kW/year. It seemed high, but this may be because the revenue from generation has been declining. Basically as utilization of peakers decline, if their standby capacity is still needed, then standby fees will go up sufficient to keep capacity online. This sort of situation shows the falacy solar putting peaking plants out of business. Solar can reduce the utilization of peakers, but contribute to needed standby capacity.
The big difference with batteries is that batteries can contribute standby capacity. In fact, batteries can earn standby fees which also drive down price of storage. Consider that new gas plants cost about $1000/kW to install. The standby fee of $190/kW/year goes against the capex of a peaker. By contrast, the capacity cost of Powerpacks is $500/kW plus costs of installation. So Powerwalls should be able to compete well in the standby capacity market. Three years worth of standby fees could fully pay for the battery.
With the new economics and the superior performance of batteries, I expect the regulatory needs for peaking plant will be adjusted to allow batteries to provide those same services. I'm not really worried about that barrier. It will come down after the economics for gas peakers have been fully trashed.
PowerWall definitely shipping: electrek.co/2016/01/14/tesla-shipping-powerwall-crate-spotted/
What is also needed is some communication protocol so that lots of small storage batteries can be summoned quickly. I think the California ISO recently put out and RFP for that. I also read that Green Mountain Power is packaging small systems so they must have designed a communication system.
stealthology
Member
I'm a little bummed out that in recent quarters, Elon has shied away from analyst questions regarding his previous statements of 'over $500m in stationary storage revenue in 2016 and maybe 5-10x that for 2017' ($3B+).
Is anyone concerned about competition in regards to Tesla Energy? I.e. Panasonic, LG, or other asian battery manufacturers undercutting Tesla due to lower labor costs, etc. I remember over a year ago Elon saying that he expects stationary storage revenue to be roughly double that of car sales revenue in the long term.
Is anyone concerned about competition in regards to Tesla Energy? I.e. Panasonic, LG, or other asian battery manufacturers undercutting Tesla due to lower labor costs, etc. I remember over a year ago Elon saying that he expects stationary storage revenue to be roughly double that of car sales revenue in the long term.
I think it's still the cost and scale. With the current phase I GF, they cannot get a decent gross margin on TE (per 2015 Q4 letter) and most likely have a negative net profit on it. Personally I think they already gave up the 400m-500m sales target for this year.
Gerardf
Active Member
It looks like news finally begins to get out that TE is very close to the tipping point of adding meaningfull revenue and gross margin for Tesla and TSLA.
Energy Sales: A Catalyst for Tesla Motors, Inc. in 2016? -- The Motley Fool
Energy Sales: A Catalyst for Tesla Motors, Inc. in 2016? -- The Motley Fool
Resurrecting this thread after 6.5 years because it seems like this will start to be relevant soon.
Full credit to https://twitter.com/Zerosumgame33 for finding all this out and pushing it hard on Twitter starting mid-December:
He also found very lucrative financial specs for Megapack in the code of Tesla website. Tesla removed it shortly after. It has been saved here: TwitLonger — When you talk too much for Twitter
There is some initial skepticism about him because he came out of nowhere and is super bullish on this and is focused on options. But others now, including https://twitter.com/garyblack00 and https://twitter.com/MatchasmMatt have recently lent credence.
Zerosum33 was on a Twitter Spaces yesterday and sounds credible to me (starts at 1:49):
Full credit to https://twitter.com/Zerosumgame33 for finding all this out and pushing it hard on Twitter starting mid-December:
He also found very lucrative financial specs for Megapack in the code of Tesla website. Tesla removed it shortly after. It has been saved here: TwitLonger — When you talk too much for Twitter
There is some initial skepticism about him because he came out of nowhere and is super bullish on this and is focused on options. But others now, including https://twitter.com/garyblack00 and https://twitter.com/MatchasmMatt have recently lent credence.
Zerosum33 was on a Twitter Spaces yesterday and sounds credible to me (starts at 1:49):
Last edited:
dhanson865
Well-Known Member
Xepa777
Banned
The history of this thread is yikes for timing lol. Buyer beware. We’re all believers of tesla energy, but it’s timing for growth (and profitability) might not be what you think it will be. Noticed a lot of people are turning to this on the eve of demand concerns across various geographies for cars (and share price collapsing 70%). This reallly shouldn’t be seen as a savior for the stock in the short run.
Lots of carebears saying that zerosumgame33 is not to be trusted, but as soon as they actually do the math they seem to come around to his point of view. It's not very hard math, just take the pack size, multiply it with a reasonable cost per kwh and suddenly you find that $1.6-$2M is left from that $2.4M price and that the rest of the stuff that goes in there isn't several complete tesla semis.
With the Virtual Power Plants (VPPs) in both California and Texas, has anyone looked at the economics of being an energy provider in these states? It seems that Texas being Texas would be wide open for dropping Megapacks near renewables and storing and reselling cheaper, 100% renewable power.
While it does seem that Tesla can easily sell every Megapack they produce, I wonder how many they may hold back for themselves to create their own mini (or large) Hornsdales?
While it does seem that Tesla can easily sell every Megapack they produce, I wonder how many they may hold back for themselves to create their own mini (or large) Hornsdales?
Not a fan of Zerosum's bullishness, and esp. margins:
-BNEF recognizes prices are increasing (there's anecdotal evidence of this, as well), but to $3XX zone, not $600/KWh Twitter-land.
-No posts (sales/orders"es) are given, which may be too much to expect, but counting on the highest price Tesla had on its web (2.1mn) = silly.
-He defends his margins by assuming these revenues, then proves them through (more realistic) costs
-As others have criticized, this is "hardware" where >50% margins never exist for long.
-Don't treat shifting 4 hours of solar load into the evening, like the next FSD. Utilities are a commodities business.
As a utility analyst, I'd agree batteries mated with renewables will outrun natural gas (with low capacity factors). I wouldn't dispute 2023 could add dimes of annual EPS to $TSLA, or possibly more, but just how hard to run with the impacts of the IRA is a process whose total optimism still ultimately faces sell-side competition. Medium/Long-term: buyer price-insensitivity will quickly attract more sellers. Don't bank on secret sauce (auto-bidder, maintenance gravy, or other margin fattening claims). The money is in fundamentally storing daily peak production, and then shifting it ~4 hours.
We are at a time of some new, non-automotive, EPS I think. Good thread bump. On a side note, very saddened to read about PZ1975. Many are $$ troubled, right now. I don't think it is time to accuse street analysts of "sandbagging" as claimed, even if the utility side shows hope. Folks have had enough false hope, already. For me, looking like a bottom off the Q4 report. However, I'd feel better if Elon were removed if he can't agree to sales restrictions & blocking up pre-negotiated trades. That went too far.
-BNEF recognizes prices are increasing (there's anecdotal evidence of this, as well), but to $3XX zone, not $600/KWh Twitter-land.
-No posts (sales/orders"es) are given, which may be too much to expect, but counting on the highest price Tesla had on its web (2.1mn) = silly.
-He defends his margins by assuming these revenues, then proves them through (more realistic) costs
-As others have criticized, this is "hardware" where >50% margins never exist for long.
-Don't treat shifting 4 hours of solar load into the evening, like the next FSD. Utilities are a commodities business.
As a utility analyst, I'd agree batteries mated with renewables will outrun natural gas (with low capacity factors). I wouldn't dispute 2023 could add dimes of annual EPS to $TSLA, or possibly more, but just how hard to run with the impacts of the IRA is a process whose total optimism still ultimately faces sell-side competition. Medium/Long-term: buyer price-insensitivity will quickly attract more sellers. Don't bank on secret sauce (auto-bidder, maintenance gravy, or other margin fattening claims). The money is in fundamentally storing daily peak production, and then shifting it ~4 hours.
We are at a time of some new, non-automotive, EPS I think. Good thread bump. On a side note, very saddened to read about PZ1975. Many are $$ troubled, right now. I don't think it is time to accuse street analysts of "sandbagging" as claimed, even if the utility side shows hope. Folks have had enough false hope, already. For me, looking like a bottom off the Q4 report. However, I'd feel better if Elon were removed if he can't agree to sales restrictions & blocking up pre-negotiated trades. That went too far.
What do you think of what JPSartre on Twitter wrote:
“The moat is
- BATTERY CAPACITY
- BRAND Liability TO SELL
- US JURISDICTION
There’s only 1 US company that can do 500 mwh avg size order
Tesla”
CATL recently prospected a multi-billion Michigan installation. They're bigger w/LFP, than Tesla (globally).
Ford, CATL consider battery plant in Michigan amid U.S.-China tensions
It goes back to how big is this window (er, "moat"), for Tesla? Could it close down to undifferentiated competition, in ~2 years? If so, modeling significant $$ stock value becomes difficult, like a single periodic windfall. This is why I like Gary Black modeling ~20% margins; there might be a smoother run-rate as things level past 2024.
Just like EVs, tho. It'll be a fast tide, that will lift all boats. >1TWh of batteries, in 2030, is mind-boggling, when you consider Hornsdale was once regarded as sorta big (~130MWh).
Similar threads
