05 November 2015
by John McDuling

Tesla gears up for Australia's electricity market


Tesla is set to make its mark in Australia - but electric cars may not be its biggest product.

Elon Musk's iconic electric car marker Tesla Motors reported results on Wednesday morning our time, and Wall Street loved them.

The company delivered a record 11,603 units of its Model S sportscar during the quarter and said it is on track with the release of its Model X SUV later this year. The company's shares have shot up by more than 10 per cent in after hours trading.


Tesla's Model S deliveries.

Tesla's cars are magnificent (believe me) but what was perhaps more interesting from the results, at least from an Australian perspective, was the following aside:

"We are seeing very strong demand for Tesla Energy products globally, and particularly in Australia, Germany and South Africa" the company's letter to shareholders from Musk and CFO Deepak Ahuja reads.

"Energy products" refers to Tesla's lithium-ion batteries that can be used to store solar energy - allowing for load shifting and providing back-up power, and, in theory, enabling people to go entirely "off the grid." The company's product for homes. the Powerwall, is expected to go on sale before the end of the year, and Australia will be among the first countries to get it.


Tesla boss Elon Musk: "We are seeing very strong demand for Tesla Energy products."

It makes sense for the company to target Australia: more than 1 million homes already have solar power systems installed, according to the Clean Energy Council. Solar power is an attractive option for many because broadly speaking, we get a lot of sun and rising power prices mean it makes long-term financial sense for many.

Earlier this year, Tesla said in a press release that the Powerall "is a compelling option for Australian residential solar users, due to the unique structure of retail electricity and the feed-in-tariff solar pricing options across the country." And on its website, Tesla argues that by "storing your home's surplus power and using it when you would otherwise need to pull from the grid, Powerwall minimises your net spending."

As nice as Tesla's cars are (and they are very nice), they remain very expensive. The company is spending billions of dollars to build a gigantic lithium-ion battery plant in the Nevada desert, which will bring down the cost of its batteries, and allow it to sell cheaper cars and become a mainstream product.

But many analysts (and Musk himself) think its battery products could actually be much bigger than its vehicles.

In Australia, that seems an entirely realistic possibility.