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Tesla Motors Inc (TSLA) Powerwall’s 40 year Problem

Tesla Motors Inc (NASDAQ:TSLA) Powerwall

The Tesla Motors Inc Powerwall would take almost 40 years to pay for itself, which is nearly four times its warranty period, claims the Institute for Energy Research (IER). The Tesla Powerwall is a lithium ion-battery for storing electricity for homes, and is priced at $7,340.

Is Powerwall a good buy?

“It would take nearly forty years for a Powerwall to pay for itself, which is almost four times the warranty period. It is highly unlikely that it would even last that long,” Chris Warren of the IER told The Daily Caller News Foundation. Its interesting to note that Tesla Motors Inc predicts its Powerwalls to have a maximum life of 15 years only, and it offers warranties of 5 to 10 year on it.

Tesla Powerwall Apple NASDAQ:TSLA

IER also founds that after 38 years a Powerwall will save enough money to justify the expense made by its owners. The owners can reduce this payback time to 31 years with the purchase of a small home solar system.

“One of the biggest issues with wind and solar is that they’re intermittent. A lot of folks point to battery storage as a solution, but this presents many technological hurdles and is extremely expensive,” Warren said. Even though Tesla claims their new Powerwall overcomes a lot of these issues, it still remains very expensive, Warren said.

A separate analysis found that the usage of Powerwall could result into a maximum saving of $1.06 a day for its owners. This means, even in the best possible scenario, it will take at least 25 years to pay for itself.

Tesla already facing rivals

Tesla Motors Inc , which is yet to launch its Powerwall battery units in the U.S., is already facing stiff competition from several battery makers. Sonnenbatterie – a German firm – plans of launching its products in the US, and one of those will be a plug and play battery system. The German firm will be making storage units in California, says a report from pv-magazine.

The German firm has already signed contracts with 30 local dealers. Citing the German firms spokesperson, pv-magazine said till now the firm has already served 1000 orders in the US. The German firm is well aware that it will have to face competition from Tesla, which has already secured enough pre-orders for its batteries that it is already sold out for the first half of 2016.

At 10.06 am EST, Tesla shares were up 1.44% at $218.76. Year to date, the stock is down almost 9% while in the last one-month, it is down over 3%. The stock has a 52-week high of $286.65 and a 52-week low of $181.40

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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