Home Editor's Picks Tesla Megapack business could be worth ‘substantially more’ than car business – RBC Capital

Tesla Megapack business could be worth ‘substantially more’ than car business – RBC Capital


Tesla Megapack business could be worth ‘substantially more’ than car business – RBC Capital By Investing.com

Breaking News


AuthorSam BougheddaStock Markets

Published Feb 29, 2024 08:33AM ET

© Reuters. Tesla (TSLA) Megapack business could be worth ‘substantially more’ than car business – analyst

Analysts at RBC Capital believe Tesla’s (NASDAQ:TSLA) Megapack utility-grade battery storage business could be worth substantially more than its standalone car business.

The firm, which has an Outperform rating and a $297 price target on Tesla, said the Elon Musk-led company believes the world needs at least 2TWh of annual battery storage at scale, which analysts assume will be reached around 2040.

“This could yield $600B in annual industry revenues,” analysts wrote. “A 15% market share could mean at least $90B in Tesla-specific battery storagerevenue.”

“Applying a 15x cap goods EBITDA multiple results in a $345B EV for Tesla’s Megapack business, and discounting this back to 2024 from 2040 results in a $120B valuation,” analysts added.

In addition, RBC Capital believes its assumptions are conservative as it assumes Tesla maintains its 15% market share despite having a 30% cost advantage over peers and that margins stay constant despite battery prices coming down.

Analysts also value Tesla’s car business conservatively at around $70 billion, well below their Megapack business valuation. However, the firm still thinks autonomy is central to the investment case and that Tesla’s new affordable model, slated to start production in the second half of 2025, “should be the next catalyst for shares.”

Tesla Megapack business could be worth ‘substantially more’ than car business – RBC Capital

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning
Do not sell my personal information

© 2007-2024 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News