Tesla (TSLA) Primed to Reshape Utilities Model; Every Household May Be a Customer by 2018 - Chowdhry

Global Equities Research analyst Trip Chowdhry weighed in on Tesla (NASDAQ: TSLA) following news the company offered to acquire SolarCity (NASDAQ: SCTY) for $2.8 billion.

Chowdhry highlights that TSLA + SCTY = Power Generation + Power Storage + Power Consumption = Your New Utility Provider.

The analyst said the current utilities operational model is obsolete, and primed to be reshaped by Tesla.

• Utilities source their energy and build their infrastructure for peak loads, which in summers usually occurs between 2 PM and 5 PM:
  • There is fundamental inefficiencies in this approach - which leads to over-building of Infrastructure
  • During some peak days, the on-demand pricing could reach $3.25 per Kwh, more than 10x the off-peak rate, a result of Utilities procuring expensive electricity
  • Charging the Li-Ion batteries during the off-peak time and releasing the stored energy during the peak load time has economic benefit
• 500,000 Tesla Model 3 will hit the road every year starting 2018 - the current electric grid does not have the capacity to cater to this enhanced load that would start to happen
• Starting 2018, almost every household may be TSLA customer, with either a TSLA Car, TSLA Battery or TSLA Solar Generation or any combination of these, or all of them
• Next, we expect TSLA to do something in the Grid as well

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