Tom Narayan, an analyst at RBC Capital Markets, has a unique perspective on Tesla Inc TSLA. He believes that the company’s core business is not just about cars, but also about autonomy and energy storage.
What Happened: Narayan shared his views on Tesla during a segment on CNBC’s “Last Call.” He said, "It's not a car company. It's an autonomy company. It's a megapack company. It's something more.”
Narayan pointed out that the recent movements in Tesla stock align with Elon Musk‘s earlier prediction of a less robust market in 2024. He emphasized that the anticipated launch of a new model in 2026 is expected to influence the stock’s performance.
His comments come after a recent tour of Tesla’s battery storage facilities. Narayan highlighted the potential of Tesla’s Megapack utility-grade battery storage business, suggesting that it could surpass the company’s car business.
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Why It Matters: Narayan estimated the battery storage industry’s annual revenue at $600 billion by 2040, with Tesla’s specific storage revenue projected at $90 billion, assuming a 15% market share.
Meanwhile, Tesla’s CEO Elon Musk has been facing a decline in his wealth. On the same day as Narayan’s comments, it was reported that Jeff Bezos reclaimed the title of the world’s richest person, surpassing Musk’s net worth of $198 billion with his own $200 billion.
The electric vehicle (EV) market has been a hotbed of investor activity, with Tesla being a prime focus. However, a prominent fund manager has advised against investing in EV stocks and suggested alternative options. Freddie Lait, the Chief Investment Officer at Latitude Investment Management, expressed skepticism about the EV sector, pointing out that despite the significant initial investments, most EV companies are yet to turn a profit.
Amid these developments, Chinese EV makers are beating their Western counterparts in the race to release new car models. This unprecedented demonstration of production speed is yet another worrying sign for U.S. automakers, who continue to fear the day Chinese EV brands start flooding the American market.
Image Via Shutterstock
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