Last year, a bidding war raged between a handful of states as each tried to woo Elon Musk, hoping that he would set up his $5 billion gigafactory in-state. Initially, everybody– analysts, politicians, businessmen– speculated that this factory could be the biggest thing to happen to the automotive industry in decades.
Fast forward to today, and the landscape has completely changed. Yes, this gigafactory is still going to be the leader in producing car batteries, but it turns out that it may dominate another multi-billion dollar industry, as well: at-home batteries.
Mark Chediak of Bloomberg writes, “Musk will lift the veil Thursday on a new generation of batteries designed to store growing volumes of solar and wind energy. If he gets it right, Tesla Motors Inc. will have spun a significant second business off the technology originally designed for its electric vehicles.”
“Nobody in the power industry has yet been able to come up with a cost-effective way to store large volumes of energy for later distribution.”
Musk, though, will be the first to make a cost effective product because of his new factory, which will be able to mass produce this typically very expensive product.
This development would have a huge impact on Tesla, opening up new revenue sources for car production. How much exactly? Well, a January report from Navigant Research estimated that revenue from grid-scale energy storage could be as high as $68 billion by 2024!
Musk, of course, has already been positioning himself to capitalize on this market. In fact, he is already supplying major companies like Wal-Mart and SolarCity with battery products. These relationships would just be a springboard for bigger things.
“Whatever Tesla announces on Thursday is just the beginning,” said Peter Rosegg, spokesman for Hawaiian Electric Co., in an interview with Bloomberg. “Tesla doesn’t have to go after the market — the market will come to them. We’re very eager to see what they have to say.”
For the automakers out there, this news is certainly troubling. Musk– who is a sort of a gunslinger– has already shaken up the entire auto scene, and now with more money and resources, things may have gotten even more interesting.