Tesla’s Secret: Elon Musk Teases New Product

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A single tweet is sending shares of Tesla (NASDAQ: TSLA) higher today. Naturally, the tweet came from Tesla’s high-profile CEO, billionaire Elon Musk.
What is Tesla’s secret?
Musk took to Twitter (NASDAQ: TWTR) with three tweets earlier today. Fresh off of his recent trip to China, Musk first tweeted a photo from the trip and then tweeted again with the following statement: “Am very optimistic about Tesla’s long term future in China, despite our earlier mistakes. Have great faith in the Tesla China team.”
Finally, he teased Tesla’s secret.


While we have no confirmation that this is the case, it seems likely that Tesla’s secret is a line of home battery packs. Indeed, this seems to be the consensus among those speculating in the media and on Twitter today.
Why do so many people believe Tesla’s secret is a home battery pack?
For starters, there is a huge discrepancy regarding the gigafactory the company is building in Nevada. According to Tesla’s own forecasts released at the time of the company’s deal with the state of Nevada, Tesla plans to build and ship 240,000 cars when the gigafactory opens its doors in 2020.
But the gigafactory will be capable of producing 500,000 of Tesla’s lithium-ion battery packs. What does the company plan to do with the remaining 260,000 battery packs the plant is capable of producing? Will Tesla run the plant at less than 50% of capacity until demand for its cars catches up?
I highly doubt it.
When we first learned of Tesla’s decision to build the gigafactory in Nevada back in September, I wrote the following:

But building the gigafactory isn’t just about cars for Elon Musk. The Tesla gigafactory isn’t a Tesla gamble on demand for electric cars. It is Elon Musk gambling on the way he sees the future of the energy industry.

Indeed, the future that Elon Musk believes in and is helping to shape involves harnessing the sun’s energy with solar panels, storing it in batteries and then using it to power our lives.
Musk, who serves as chairman of SolarCity’s (NASDAQ: SCTY) board of directors, and who helped get both Tesla and SolarCity off the ground, is clearly well on his way to making this dream a reality. The genius in all of this has been the way Tesla and SolarCity have partnered and continue to co-brand their products.
As an example, Tesla’s supercharger stations are powered by SolarCity solar panels.
It doesn’t really surprise me, then, that shares of SolarCity took off alongside shares of Tesla after Musk’s tweet. The chart below shows how the two stocks moved higher on the news almost in lock-step.
3.30.15 TSLA SCTY
The other reason to think Tesla’s secret is a home battery pack is that Elon Musk has already told us the company is working on such a product.
Back in February, Musk announced on the Tesla earnings call that the company would “unveil the Tesla home battery, the consumer battery that would be for use in people’s houses or businesses fairly soon.”
He later said on the call that the announcement would come in the next month or two and told Bloomberg that “we have the design done, and it should start going into production in the next six months or so.”
The timing certainly matches up, as does the logic behind the gigafactory’s capacity to produce more than double what Tesla has forecasted it needs for its cars.
Of course, I could be completely wrong. Tesla could announce an electric motorcycle, an electric airplane or any number of other things the market isn’t expecting.
One thing is for sure: Tesla’s secret has the market excited for the company’s April 30 announcement.

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