The Effect Missed in Tesla’s Sweeping Vision for the World

Tesla is accelerating the widespread use of sustainable energy. The company is doing that by creating products that appeal to consumers, whether they save the planet or not.

There were electric cars before Tesla, but they looked more like oversized electric shavers, rather than the powerful, sexy, luxury cars that people want to own.

Some analysts see Tesla as no more than an overpriced car company. That Tesla may be more than that, was revealed by Elon Musk last week, when Tesla revealed its latest innovation — roof tiles.

Yes roof tiles. But there was nothing mundane about the roof tiles he came to discuss.

On what used to be the film set for the Desperate Housewives TV series, at Universal Studios in Los Angeles, Musk showed off his new roof tiles, which were refitted on four of the houses that were part of that set.

Journalists were there to see Musk’s new solar roof. But as they walked in, they didn’t see any clunky photovoltaic cells mounted on roofs, or anything that looked like it could carry an electric current.

Few journalists in attendance, if any, realised that the roofing tiles themselves were functional solar panels, until Elon Musk said so.

Instead of an unattractive array of solar panels, these roofs looked remarkable. The solar panels are integrated within the roof tiles themselves, and send electricity into Tesla’s home batteries.

The roofs are as appealing as the cars Tesla produces — a product that people will want to own, whether it’s green or not.

Not only do they look good, Tesla’s tiles are more resilient than traditional roofing materials, such as terra-cotta, clay and slate tiles. That’s because of the toughness of the glass used in their construction.

The new roofs will be offered next year and, according to Musk, over time the overall cost will be less than installing a regular roof and paying the electric company for power.

Source: Tech Times
Click to enlarge

As part of the launch Musk revealed the Powerwall 2, a new version of the company’s residential home battery, which has twice the power.

If you combine the Powerwall 2 with the new solar roofs, you can power your home indefinitely, without drawing power from the grid. The future is exciting.

This event last week was timed to push the case for Tesla’s proposed acquisition of SolarCity.

SolarCity is the United States’ largest home solar panel installer. The merger, which shareholders will vote for on 17 November, is part of a master plan to build a company that makes products to speed the world transition to renewable energy.

This is Musk’s long-term vision, a future powered entirely by Tesla. A trinity of personal electric power.

You have a great looking Tesla solar roof, which collects the sun’s rays during the day and then stores energy in Tesla’s Powerwall home battery system. The power is then discharged in the evenings, not only to power the home, but also to recharge an electric car in the garage; likely also one of Tesla’s models.

That’s a dynamic which is scalable throughout the world, and can be taken worldwide to bring clean energy to the next level.

This trinity, taken together, carry the promise of self-sufficiency. It’s empowering the individual with direct control over power generation.

It’s a new relationship with electricity. Generating it, storing it, and using it to get around.

A world powered by Tesla, with one ordering experience.

It’s exciting what Tesla is doing, but not everyone shares that excitement.

World renowned market commentator Marc Faber, editor of the Gloom, Boom and Doom report, believes Tesla shares are going to zero.

That could be part of the reason why Tesla shares are one the most shorted stocks in the Nasdaq 100, with nearly a quarter of the company’s stock being sold short.

The chart of the share price has basically been trading a range sideways for the last couple of years. It looks neither bullish nor bearish. Rather than listening to the pundits, I suggest listening to the market and letting it guide you.

If Tesla is going to zero as renowned pundit Marc Faber suggests, then it will first have to break prior lows from previous years. It’s OK to have an opinion on Tesla, or any stock for that matter, but only move with the market when you get some confirmation from the chart.

When you start to see the long term vision of where Tesla is going and how that model is scalable throughout the world, there’s probably better stocks to go short on. Sure, Tesla will face competition, but they have front running in all parts of their trinity of roofs, battery storage and cars.

There’s a broader point to Tesla’s holy trinity of green power, which goes beyond market movements. It’s an effect that most will simply miss.

When this starts to become affordable, and we enter a world without electricity bills, without petrol bills for your car, you can see where all this is all heading.

Initially the technology may be prohibitively expensive. However, over time competition and better, cheaper ways of producing things, will bring down the price of the solar roofs, the powerwall battery storage, and electric cars.

Competition will always force prices down to more affordable levels. But there’s one area of the economy which is not subject to the laws of competition. That, of course, is real estate. Land surrounding the services we all want to use is fixed in supply; therefore it will simply soak up any gains.

Should innovation make it cheaper to live, if eventually consumers don’t have to pay for power to run their homes and cars, then they will be able to afford to pay a little more in rent.

There are so many reasons why property can go higher, when you see the world through the lens of the real estate cycle.

Innovation is another reason why this real estate cycle will continue to build.

Subscribers to Cycles, Trends and Forecasts know all about this dynamic. To get this advantage, to understand how all this can be forecasted and how you can time it all to your advantage, go here.


Terence Duffy,
Lead Researcher, Cycles, Trends & Forecasts

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Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come.

Money Morning Australia