Tesla Motors is expected to announce a new product later this week: Residential and Commercial Battery Systems. It's clear Tesla is expanding its close partnership with Panasonic, the world's largest manufacturer of Lithium Ion Batteries, through the upcoming Gigafactory plant in Sparks, Nevada. Investors and Tesla advocates immediately speculated that the new product line would be a battery system.
The new product and business model were originally alluded to by founder Elon Musk on his twitter account.
Major new Tesla product line -- not a car -- will be unveiled at our Hawthorne Design Studio on Thurs 8pm, April 30
— Elon Musk (@elonmusk) March 30, 2015
SolarCity just hit a new daily energy record of 5GWh two weeks after reaching 4GWh
— Elon Musk (@elonmusk) March 31, 2015
With all that solar power being generated, it almost feels like something is needed to complete the picture ...
— Elon Musk (@elonmusk) March 31, 2015
While formally being announced on April 30th, Tesla seems to have confirmed this reasoning through a letter to investors. The letter confirmed a "home battery" and a "very large utility scale battery."
There is intriguing business genius with this move. The company is planning on scaling up battery production with the aim to achieve massive economies of scale. Designing a high potential battery product for homes and businesses could help create demand and expand its market position into the electric utility world.
For the customers, it makes economic sense to buy and store electricity at night when the price is low. The system could even sell unneeded electricity back to the grid when prices are high.
Widely implemented, systems like these could help the expansion of renewable energy sources that provide power intermittently when the sun shines or the wind blows.
Around 300 customers have already installed Tesla's batteries in their homes, reports The Guardian. "It’s clean, it’s quiet and it looks good in the garage," investment analyst Trip Chowdhry told the newspaper, adding that the system appeals to customers who want a constant connection to the internet. "If you are a gadget person living a digital life — you have iPhones and computers and you always want to be connected — the storage battery is a dream come true."