Skip to comments.Elon Musk Announced Another Huge Bet Today, And The Fate Of The Solar Industry Is Riding On It
Posted on 06/17/2014 11:58:19 AM PDT by PoloSec
We recently explained how Tesla needs to build what it is calling a "gigafactory" for batteries in order to survive. The rest of the world is not building enough lithium ion storage to meet what Tesla thinks will be surging demand, so it has decided it must do it itself by making a very costly factory.
Tuesday, SolarCity (Elon Musk's other company) announced it will have to do the same for solar panels. The firm unveiled plans to build one of the world's largest high-efficiency solar panel plants, using technology from Fremont-based Silevo, which they also said they'd acquired.
"We expect to have to install 10 gigawatts [of high-efficiency panels] a year," Chairman Elon Musk said on a conference call announcing the move. "If you look at the current capacity in the world, we're not able to do that right now."
It's not just a supply question. Solar panel prices have been falling in recent years thanks to a production boom in China. But the panels getting produced, though cheap, aren't terribly efficient and prices have begun bottoming out anyway.
They are likely to begin climbing: Government subsidies for renewables start getting phased out in 2016, and the political environment for rebooting them remains unstable at best.
Plus, in a call with BI, CTO Peter Rive said recent U.S. moves to slap tariffs on Chinese panels served as a "catalyst" for looking into building the Silevo plant.
Will the demand be there? The firm's own polling suggests there is. But if you assume that electricity customers are price agnostic, rooftop solar still has some ways yet to go to become cost competitive with fossil fuels. Musk recognizes this and beating fossil fuels at their own cost game remains his ultimate goal.
(Excerpt) Read more at businessinsider.com ...
Is there some magic source of electricity I don't know about?
More businesses totally underwritten by Federal Leftist Grants.
How much is the Federal Government putting into this boondoggle and how much will Musk siphon off the top for ‘management fees’ and CEO salary?
Tesla stock looks like the biggest slam dunk short I’ve ever seen.
But I’d never bet against a regime ally.
There are two magic sources of electricity - hydroelectric and nuclear. They are both incredibly safe, cost effective and even carbon free for believers in that particular strain of voodoo.
Unfortunately they are both considered “icky” by the watermelon tree-huggers, so neither one will be properly developed and expanded.
nobody says EVs are green. (or at least I don’t)
EVs are disconnected from Arabs and Exxon.
Is there some magic source of electricity I don't know about?
Don't forget how gaia herself delivered all the materials free of manufacturing to Tesla.
They are not disconnected from the carbon dioxide scam, which is just as dangerous as the Arabs.
I hope solar goes down the flush and he loses his ass!
SCTY up 18.5% today
People have been saying that since it was $150...
I remember when people were saying Amazon was a slam dunk short back in the late 1990's.
Musk’s salary is $33,280 per year at TSLA and is not listed in the SCTY proxy.
The vitriol for a disruptive innovator like Musk on this site is astounding...
“When you can show me that Fukushima, WIPP and Hanford are clean enough for you to visit with your family for a picnic, then we can consider the nuclear option. “
If the nuclear power plant mfrs. had any reason to believe that the US would allow the technology going forward, they would invest in better technology. There have been no major improvements to nuclear power generation for decades thanks to our government. As for Fukushima, TELCO was negligent in how in managed their nuclear plants. To a large degree the problem was poor management and maintenance practices and not upgrading their plants to avoid catastrophes. It’s like replacing the Bay Bridge in San Francisco. We could have bet that “ the big one” wouldn’t come along any time soon, or we could replace an aging, deficient structure. We did the latter.
Bezos is a Baraqqi crony capitalist also.
I never bet against the regime, at least for now.
But my hope is to someday be the next John Paulson.
Amazon also did pretty well when W was president.
For a company that hasn’t ever made a profit, they certainly do have investor enthusiasm.
For a company that hasnt ever made a profit,
Are you sure about that?
Maintenance of the current nuclear generating stations is almost a joke. My now deceased neighbor worked at a shop in Idaho Falls. The shop specializes to building replacement instruments for equipment at nuclear power plants. The failed parts have to be replaced with custom built units that meet the old physical and electrical specifications, but using components of current manufacture. The plants have outlived their OEM suppliers.
“TEPCO is/was in competent, corrupt operator.”
Absolutely correct! And I will bet you that the operators here in the US cut corners as well. Nuclear power would be a boon to the world if only the businesses that run them had a modicum of ethics. It is one thing to screw people on the crap they buy so long as no harm become them. But all you have to do is look at how GM responded to known safety issues with some of their vehicles. It’s as though they do a calculus that says “ how many deaths can we afford as opposed to the money it would take to fix the problem.” I believe that the nuclear power companies are likely to be making the same differentiations.
Looks pretty good for a growing company to me, and they are profitable. $90 billion in revenue for a company that had less than $10 billion ten years ago is impressive.
If AMZN has made you wealthy, far be it from me to snark at it. There are a lot of people making big bucks at “non-profit” organizations.
From what I’ve read, Bezos likes to limit profits in order to be competitive and to discourage competitors. Consumers benefit from lower prices. Amazon doesn’t always have the lowest price, but I always check. I’ve found their guarantee and return policy to be top notch and sometimes I’ll pay a bit more for that.
I buy most of my books from Amazon. The nearest bookstore
to my house is 53 miles.
Yeah AND they built it in an area that was always at risk to suffer both large earthquakes AND tsunamis...
Or in engineering terms "stupidity cubed"...
>> watermelon tree-huggers
Don’t stand under the watermelon tree.
From its peak in 1999, it did drop over 90% by September 2001.
Perfect buying opportunity, too.
Sure, much better than before the 90% drop.
A person would have have made a respectable return on the long side either way, one good, one great.
A short seller could have picked several successful tech companies and made money when Amazon was at its late 90’s peak.
Hard to argue it wasn’t a slam dunk short.
“Yeah AND they built it in an area that was always at risk to suffer both large earthquakes AND tsunamis...
Or in engineering terms “stupidity cubed”...”
But remember they have to kowtow to the NRC. The NRC is like the FAA,. Some of the FAA’s ATC equipment is so old that they have to pay a company to stay in business to make vacuum tubes so they can “maintain” their equipment.
Some people were convinced that Amazon was worthless. Had they held on waiting for it to become worthless, they would be cleaned out or faced numerous margin calls by now. Shorting also involves timing. How does one pick the top and the bottom? What if someone had shorted the stock when Blodget made his $400 call? What if someone had added to their short position as the stock fell and kept holding on past the bottom?
Shorting isn't easy. Your maximum gain is 100%, but your potential losses are limitless, just the opposite of going long. Of course, experienced traders can use options, but I don't think the OP I was responding to is one of those.
Clearly not worthless. At that point, clearly not worth $400.
Shorting isn't easy.
I agree, I wanted to short it at those nosebleed levels but was too scared.
Morgan Stanley On Tesla: ‘Whoa’
Screen Shot 2014 06 17 at 2.30.12 PM
Morgan Stanley’s Adam Jonas is out with an awesome and slightly hilarious note in which he argues Tesla is now, maybe, the most important car company in the world.
“Not even two years after the delivery of the first Model S, Tesla Motors has transformed from fledgling start-up to arguably the most important car company in the world. We are not joking.”
He groups a series of amusing anecdotes into three sections about how the auto world can’t stop talking about the California-based electric carmaker.
First there was the recent two-hour dinner Jonas had with the CTO a global parts mega-supplier. Half the meal was spent discussing how no one is doing what Tesla is doing to advance electrification and how suppliers are considering devoting new lines and facilities to make parts for the company.
Next are all the state governments clawing over themselves to land one of Tesla’s gigafactories, which could even someday end up moving the needle on U.S. GDP itself. Jonas said Tesla could wind up employing 20,000 employees directly and supporting up to 150,000 other jobs upstream and downstream.
And finally, there’s what the traditional automakers are saying, talk that has caused Jonas to go full Keanu.
“General Motors last year established its ‘Team Tesla’ to advance the development of long range EVs. A BMW engineer recently explained to us how Tesla’s presence has helped reinvigorate the spirit of automobile innovation that was beginning to run stale, further testifying that BMW will be a stronger company longer term because Tesla is around. Whoa.”
Jonas has a $320 price target on the stock. Shares were trading at $233.
AMZN’s R&D and CapEx (and resulting depreciation) investments are what drive their net profit down. That’s why profit is a worthless measure. Look at their EBITDA.
EXACTLY. It all goes away in D&A commensurate with their CapEx (running 5% of net sales). One only needs to look at their Cash Flow statement to see that they massively invest in their business.
That’s the entire point. All of those nuclear reactors were the idiotic boiling water type.
I would have no problem living next door to a pebble bed or thorium molten salt reactor.
Your perception of nuclear power (along with the rest of the world) has been shaped by a farce perpetrated by Westinghouse and GE. They bribed the Department of Energy into licensing designs that were guaranteed to have major problems, thus destroying the reputation of what is BY FAR the safest source of power in the world.
Oh they’ll get built - in China and India.
There are some Musk supporters on this site. I’m a believer of Tesla and Solar City and I’m no wacko environmentalist. Like any sector, there are good and bad. Solar has gotten a bad reputation because of so many poorly run solar businesses. I think Musk may have broken the mold. I’m pretty excited for the future with Solar city + tesla batteries
Agree good post. Interesting news about Panasonic and the gigafactory yesterday. http://www.cnet.com/news/tesla-and-panasonic-said-to-reach-agreement-on-gigafactory/