Tesla’s energy division has emerged as a significant contributor to the company’s progress. In the recent second-quarter report, Tesla’s energy deployment numbers have impressed analysts, leading to a reevaluation of the division’s worth within the company.Tesla’s energy division has emerged as a significant contributor to the company’s progress. In the recent second-quarter report, Tesla’s energy deployment numbers have impressed analysts, leading to a reevaluation of the division’s worth within the company. Morgan Stanley analyst Adam Jonas has increased Tesla’s price target to $310, with $50 assigned to the energy division. This adjustment reflects the belief that Tesla Energy is a valuable asset, surpassing its previous valuation of $36. Tesla has consistently expanded its energy deployments, achieving a record 9.4 GWh in Q2, a remarkable 132% increase from Q1. CEO Elon Musk has emphasized the potential of the energy division, predicting its significant growth in the future. The energy division’s success is attributed to Tesla’s large-scale energy storage capabilities, which support its electric vehicle business and contribute to grid resilience. As Tesla continues to grow its automotive business, the energy division is expected to play an increasingly significant role in the company’s overall success.
Tesla’s energy division was the talk of the town in its second-quarter vehicle deliveries report released last week.
Tesla’s second-quarter energy storage deployment numbers have led Morgan Stanley and analyst Adam Jonas to consider the division a factor in the company’s $310 price target for its stock.
“It’s no wonder investors are starting to consider that Tesla Energy may be worth more than Tesla Auto,” Jonas said in a note to investors.
In the grand scheme of perception, most see Tesla as a car company. The reality is that Tesla is much more than that. It builds cars and uses energy storage units on a large scale; it could also be considered an AI, robotics, and software company.
While Tesla’s stock has risen since reporting a 6,000-unit delivery surplus above Wall Street consensus estimates, the biggest shock may be the performance of its energy division. It’s also one of the reasons analyst firms are raising their price targets.
The company saw a huge increase in energy deployments in Q2, setting a company record, and not in a modest way. Tesla saw a dramatic 132 percent increase over Q1, which was a company record at the time it was reported.
Tesla reported deployments of 4.053 MWh in Q1, but that was drastically eclipsed by the 9.4 GWh it reported in Q2. It all goes back to things CEO Elon Musk said years ago.
Musk said nearly five years ago during Tesla’s third-quarter 2019 earnings call that Tesla’s energy division could become a much larger part of the company than its automotive division.
“IT could be are bigger, but it will Certainly are of a comparable “I think Tesla Energy is going to be a significant part of Tesla’s business going forward,” he said. “It would be hard to overstate the extent to which Tesla Energy is going to be a significant part of Tesla’s business going forward… I think both of those, over time, are going to grow faster than the automotive business. I think, particularly if you look at sort of — if you look at, like, year-over-year growth, it’s going to be absolutely incredible… over the course of, let’s say, a year, a monumental increase.”
Jonas believes the same. In fact, his $310 price target is broken down in a way that reflects auto making up $284 of that, Reuters said. Previously, Energy was only worth $36 of the $310.
Now he’s raising it to $50 a share, which also takes into account Morgan Stanley’s cut in auto sales for the company in 2030.
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