Tesla Inc (NASDAQ:TSLA) joined Wall Street’s prestigious S&P 500 index on December 21 as its sixth-largest member, becoming the latest tech inductee alongside the likes of Amazon, Apple and Facebook..
Does he have the energy?
Tesla’s automotive arm dominates but its energy business, which encompasses solar energy and battery storage, is not doing too badly and the company is preparing to step up its move into the UK energy market in 2021, having reportedly filed an application for a British electricity provider licence not long ago.
It is already making significant contributions to UK renewable energy projects, but by entering the UK domestic energy market, the company is likely to follow the model it has used in Australia. This involves supporting the grid with its battery technology and its Autobidder energy management software. This set-up means it sits between energy producers and households, allowing people to switch their energy tariffs automatically onto the cheapest renewable source, based on the market price. This sort of localised power setup is just the ticket for the new regulatory regime, according to Ofgem’s latest declaration.
In the third quarter of 2020, the company, which sells varying sizes of domestic and industrial battery, from the wall-mounted Powerwall up to the Powerpack and Megapack, shipped 759 megawatt-hours worth of batteries, an 81% increase from the second quarter.
READ PART I OF THE SERIES: A new year for Tesla but the same old shorts for Elon?
In the past year, Tesla also unveiled a project for its ‘solar roof’ to power a new suburban housing estate in Mississippi, linked to the company’s Powerwall batteries and other energy-efficient equipment and appliances. Construction is scheduled to begin in early 2021.
The energy piece could eventually be worth $500bn alone, Goldman Sachs reckons, based on extrapolating Tesla’s North American opportunity to the rest of the world, based on selling 5mln solar roofs and Powerwalls a year – even though 5mln rooves would represent the entire annual US replacement market plus new homes.
Musk’s SpaceX will also be busy
Away from Tesla, finally, and Elon Musk privately-owned aerospace business, Space Exploration Technologies Corp, or Spacex, has been holding talks with investors about new fundraising, after drumming up over US$2.4bn in 2020 and on track to have completed 25 orbital launches by the end of December.
The rocket company’s valuation in August was put at US$46bn as 75 investors bought shares.
Musk recently said SpaceX could send its first uncrewed spacecraft to Mars by 2022, with astronauts flying to the red planet within the next four to six years. Noting that trips to Mars depend upon a two-year cycle of the planet’s orbit lining up with Earth’s, he said the next windows were in 2022, 2024 and 2026.
He said he was “highly confident” of SpaceX astronauts flying to Mars in 2026. “If we get lucky, maybe four years. And then we’re going to try and send a vehicle there in two years,” he said.
Closer to our home planet, there is plenty on the horizon for SpaceX, including the first orbital flight of the fully reusable Starship and several launches of its Falcon 9 rocket in the first quarter alone, including various ‘rideshare’ missions and to deploy the company’s Starlink mini-satellites. Starlink’s internet service will begin wide-scale public beta testing in late January or early February 2021.
For October, Musk is even aiming to race a pair of remote-controlled cars on the surface of the Moon, with plans to launch the vehicles aboard a SpaceX Falcon 9 rocket and carried to the moon in a Nova-C lunar lander made by another company called Intuitive Machines.
Musk other side-project, the Boring Company, in December was given approval to extend its big tunnel under Las Vegas, known as the Vegas Loop project.
While the Boring Co is focused on its mass-transit Hyperloop idea, the Sin City project is in construction with the aim of, get this, allowing cars to drive underground between various casinos and resorts with The Strip, local sports stadium and local airport. Maybe the traffic there is especially bad.
Next year may bring some more excitement for the Boring team, with permission pending for two major projects: one is a similar tunnel to give baseball fans and concertgoers a short-cut under Los Angeles to the Dodger Stadium from East Hollywood, the other is a proposed Loop autonomous vehicles transport system on the East Coast, connecting downtown Washington DC to Baltimore.
…and Musk’s wealth
Musk, who owns around 20% of Tesla shares, in the past year, moved up to second in the Bloomberg Billionaires index, overtaking Microsoft founder Bill Gates.
Although he is spending some of his cash on getting to Mars, Musk’s net worth was nearing US$130bn in early December.
A US$3.5bn stock option award in October after Tesla met the target of maintaining a six-month average market value of over $250bn was one of three giant stock option packages that form part of his controversial performance-based compensation plan agreed in 2018.
This 10-year award program could mean Musk is eligible to receive a total of US$56bn worth of stock options over the period if he meets various lofty goals, including growing and maintaining the company's market cap above US$650bn by 2028, a level that has already been breached.