Boston, MA 03/04/2014 (wallstreetpr) – Rumors have been flying high ever since Tesla Motors Inc (NASDAQ:TSLA) announced the plans for its giga factory. The factory, due to start production only in 2017 has attracted a lot of attention and many are making their own inferences. Let us look at some of them.
Inference No. 1: Apple And Tesla To Merge:
Well, the first inference may not be connected to the announcement. Rumors have been flying about for quite some time that Apple Inc (NASDAQ:AAPL) is looking to acquire Tesla Motors Inc (NASDAQ:TSLA). There are some common grounds between both the companies. Both have come out with innovative products with the power to disrupt the industry. Apple has succeeded in this by disrupting both the music distribution industry as well as mobile handset segment. Tesla may have the potential but it is yet to make a significant dent in the auto industry. Business acquisitions and mergers make sense if both the companies are in the same industry; this is not the case with Tesla and Apple.
Inference No 2: Tesla Will Enter The Home Segment:
Now, there may be some truth in this. After all the mega factory for batteries is expected to have huge production runs. It is currently not expected that the auto industry will absorb all of the production. The production is expected to be 30 gigawatt hours per year. Incidentally, that why the factory is referred to as a giga factory. This will help to reduce battery costs, not only to Tesla Motors Inc (NASDAQ:TSLA) but also to other battery users like Apple Inc (NASDAQ:AAPL). Though the batteries are different, they differ only in their capacities. If Tesla succeeds in this venture, it will be able to disrupt the battery industry for good. Another segment would be the home energy segment. Utility companies are already trying to curtail peak demand through higher rates. Energy cannot be stored and hence has to be used when produced. Current battery solutions are not very effective in storage. If Tesla and its partner Panasonic are able to breach this barrier, a whole new segment can open up.
Till such time, we can only visualize how Tesla Motors Inc (NASDAQ:TSLA) plans to use the batteries.
