Tesla's stock rose more than 15% on Tuesday morning after a Morgan Stanley analyst speculated that the company's technology could be used to disrupt the utilities industry.
"Tesla’s quest to disrupt a trillion-dollar car industry offers an adjacent opportunity to disrupt a trillion-dollar electric utility industry," Adam Jonas wrote in a new note to clients, according to Business Insider. "If it can be a leader in commercializing battery packs, investors may never look at Tesla the same way again." Jonas raised his target on Tesla to $320 from $153.
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Though Jonas' musings seem to have lit up the market, the idea isn't new. The Atlantic reported in November that some California homeowners were interested in using Tesla's battery packs in conjunction with solar panels to power their homes for $40 per month. However, PG&E, the local utility, was charging a prohibitive $800-plus fee. In 2010, the California Public Utilities Commission also awarded $1.8 million to SolarCity to study the feasibility of using such batteries for that purpose.
In homes and businesses, the optimal use for Tesla's batteries so far are augmentations to traditional utilities. The batteries store up power when the sun is shining, and then homeowners or business owners use them when pricing spikes. Solar City plans to introduce a bundled package of solar panels and Tesla batteries in 2015, according to Bloomberg.
Shayle Kann, SVP of research at GTM Research, says Tesla's success is by no means guaranteed in utilities. Kann says Tesla would have to increase production of its batteries to make more of them and sell them cheaper. That's possible, Kann says, but makes a lot of assumptions. "It certainly hasn't been a bit part of their business to date," he says.
Tesla's lithium-ion batteries are the primary reason for its success in shaking up the auto market. The company's Tesla Roadster, released in 2008, was the first model in the U.S. to offer more than 200 miles on a single charge.
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