A Coming Tailwind for TSLA Stock?
When Elon Musk teased an upcoming “Master Plan” for Tesla Motors Inc (NASDAQ:TSLA), he must have known it would create a cloud of eager anxiety around TSLA stock. But what’s in this mysterious plan of his?
While no one but Tesla’s upper echelon can know for sure, I have some ideas about where Musk is headed with this plan. I correctly predicted the Tesla-SolarCity merger as early as November 2015, so it’s not like I’m completely shooting in the dark.
I understand Elon Musk’s vision. Moreover, he has left a clear trail of clues that betray his intentions. It’s not exactly rocket science to piece them together. Anyone paying close enough attention should be able to figure it out.
I have a hunch that the “Master Plan” will finally make clear his reasons for wanting to acquire SolarCity Corp (NASDAQ:SCTY). If I’m right, TSLA stock could shoot up to $250.00 per share in the immediate aftermath.
Here’s what I think the plan will include:
1. Rebranding “Tesla Motors” into “Tesla.”
Musk named his electric car company “Tesla Motors” in part because his preferred URL was already taken. Somebody else owned www.tesla.com. However, that URL became available recently and Musk jumped at the chance to own it. He’s already shifted over Tesla’s entire web site to that address. I think this means he’ll rename the entire business to just “Tesla.” He never wanted to pigeonhole it in the car business in the first place and he now wants Tesla to be an energy company as well. Buying SolarCity Corp is a dead giveaway that he intends to restructure the business.
2. Promoting SolarCity as “Tesla Energy”
If SolarCity agrees to Tesla’s proposed acquisition, the company would likely end up under the “Tesla Energy” banner. Not only would the popular brand name raise the profile of rooftop solar, but it could also help package rooftop solar with Tesla’s “Powerwall” batteries. The Powerwall was designed with SolarCity in mind, so it only makes sense to market them together. Selling solar panels at Tesla’s dealerships could also slash the firm’s customer acquisition costs, which is the biggest drag on SolarCity’s business model.
This isn’t just me guessing, either. Elon Musk himself has talked about creating an end-to-end energy company, which would help customers produce, store, and use their own renewable energy.
“When we’re selling someone a Powerwall, very often, if not always, they’re curious about solar,” he said on a June 22 conference call. “Not being able to sell them solar panels at Tesla dealerships is pretty inefficient.” (Source: “Tesla Motors Conference Call,” Tesla Motors Inc web site, June 22, 2016.)
3. Making Energy Independence “Normal”
The end goal of Tesla’s “Master Plan” is to normalize energy independence. Elon Musk wants to make every home into a reactor that can collect and store enough energy to power itself. That is his moonshot goal. No more bills from utility companies or sweating over higher oil prices.
Musk is betting that solar panels will eventually grow efficient enough to eclipse all other forms of energy consumption. One of the ways he could achieve that is by packaging a rooftop solar lease with every Tesla vehicle. With interest rates at historic lows, it seems like an offer that most Tesla customers would accept. After all, the company has said there is significant overlap between its target audience and SolarCity’s target audience.
From Elon Musk’s statements, particularly those made after the SolarCity offer, it’s pretty obvious he’s headed in this direction. Anyhow, we’ll know soon enough.
Musk tweeted on Tuesday that he’s close to finishing the “Master Plan:”
Will be working at Tesla on Autopilot & Model 3 today, then aiming to pull an all-nighter and complete the master product plan
— Elon Musk (@elonmusk) July 19, 2016
He followed up the next day:
Finishing off the plan while listening to the soundtrack from Gatsby. Seems appropriate…
— Elon Musk (@elonmusk) July 20, 2016
So, we can say with certainty that Musk is going to drop this bombshell soon.
One thing is for certain: Musk’s “Master Plan” is bound to have a huge impact on TSLA stock. If the plan is what I think it is, TSLA stock should end up surging to $250.00 per share.