Tesla Inc NASDAQ: TSLA

The Australian Financial Review reported that a Tesla executive promised to deliver a Tesla battery (100 – 300 MWh of storage) to South Australia within 100 days of signing a contract with Tesla.

Mike Cannon-Brookes, a key figure behind Atlassian, tweeted: “How serious are you about this bet? If I can make the $ happen (& politics), can you guarantee the 100MW in 100 days?”

Tesla CEO Elon Musk tweeted back about the Tesla battery: “Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?”

“You’re on mate,” Cannon-Brookes responded in regards to the Tesla battery. “Give me 7 days to try sort out politics & funding. DM me a quote for approx 100MW cost – mates rates!”

Experts expect those production levels are now possible due to the Gigafactory increasing production.  The facility will make a large number of Lithium-ion batteries with its partner Panasonic.

Power outages in Australia spurred the conversation over Twitter. Low gas prices and harsh weather are to blame. Tesla hopes to relieve energy needs during peak times.

But the company faces another challenge related to its batteries.

Some business writers believe the Tesla Model 3 may become the worst thing to happen to the automaker. The Tesla Model 3, a small car, will arrive later this year. But consumers want large trucks and SUVs. Those vehicles garner big profits. In addition, compact crossover SUVs remain the auto of choice. Automakers want to keep making small cars. Gas prices spiked big time when they reduced small car production. Then small vehicles became in vogue. The current political environment makes it hard to move small-car production to other countries.

Those countries may offer cheaper labor costs. The Tesla Model 3 shall arrive in this new world in late 2017.  Tesla aims to produce 10,000 of those cars per week in 2018. The company plans to deliver 500,000 annual car deliveries in 2018. The Tesla Model 3 logged nearly 400,000 pre-orders for the car. The question remains — will Tesla profit from the much lower profit margin of the new car? Some pundits cast doubt that Tesla can. Plus, history shows the company’s earnings fluctuated over time. Plus, PR disasters hurt the company’s image.

We reported previously that Tesla’s fourth quarter earnings fell short. The company lost money after making a profit during its third quarter. Notably absent was guidance on vehicle deliveries for 2017. In 2016, the auto maker predicted delivering about 90,000 vehicles. But the company managed to sell only 75,000. The 2017 year will yield about 50,000 Model S and Model X vehicles all together. That is up to 71 percent for the same period in 2016. Tesla fourth quarter earnings revealed the company will make 5,000 of its new Model 3 cars during its fourth quarter.

Tesla Battery Could Drive Profits

But the company will make 10,000 vehicles per week sometime in 2018. CEO Elon Musk wants to deliver 500,000 vehicles annually by that year. Still the company must increase its output greatly to meet that goal. Tesla fourth quarter earnings did not receive a comment from the auto maker. While its production woes continue, it faces issues in its showrooms. Lastly, several accidents occurred over the last year due to this new technology. Pang was one such driver. His Tesla Model X crashed while the owner headed from Seattle to Yellowstone National Park in Montana.

Source: Ars Technica

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