Analyst: Tesla Gigafactory Worth $50 Billion

An analyst at Global Equities Research by the name of Trip Chowdhry has publicly commented that he considers the market value of the Tesla/Panasonic Gigafactory to be $50 billion, according to recent reports.

Considering that the projected development costs of the Gigafactory total “only” $5 billion, and also that Tesla’s current market capitalization is around $32 billion, that figure is quite a notable one. Whether one agrees or not, it’s a number that gets one’s attention….

JB Straubel and Steve roof of Tesla Gigafactory

In his denouement on the subject, Chowdhry drew an analogy with Amazon — noting that the company was originally just viewed as being an online bookseller, not the nearly end-all-be-all of online shopping that it now is.

Just the tip of iceberg was seen at the beginning, in other words. Could Tesla represent such a game-changing force, with such far-reaching effects on the broader industry, as Amazon has? An interesting question. Tesla’s case has certainly been getting stronger and stronger as of late….

“The analyst bases his valuation on the potential revenue stream he sees being generated by the battery factory. Chowdhry believes that the Gigafactory will be capable of generating as much as $100 billion in revenue for the company over the next 20 years. He calls what Tesla is doing with its Gigafactory ‘new industry creation activity,’ meaning that the potential revenue from the enterprise is far greater than most people realize,” Teslarati notes.

“At the annual shareholder meeting on May 31, Tesla announced that its battery output potential could triple to nearly 105 gigawatt-hours of battery cells and gigawatt hours of battery packs for energy storage. Combined, that is nearly three times the total production of lithium ion batteries in the entire world. Musk also noted that the battery plant will also be updating the form factor of its existing cylindrical Li-ion cell that carries a 18 mm diameter and 65 mm height better known as an 18650 to a larger diameter and taller 20700 cell (20 mm dia x 70 mm height).”

While I wouldn’t personally go quite as far as Chowdhry does, I do think that Tesla is likely to be a very disruptive presence over the next decade or so. In the auto industry, and possibly in the energy storage industry as well (presuming the Gigafactory drives down the cost lithium-ion batteries substantially).

Photo by Steve Jurvetson (CC BY 2.0 license)

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