In recent weeks, discussions over the credibility of Elon Musk’s statements have been culminating. Even though the commencement of the Model 3 production and Q2 deliveries grabbed the most attention, the last few days indisputably belonged to Tesla’s Australian energy storage deal. Much to my surprise, the project has been immediately surrounded by a strong wave of skepticism, which comes primarily from Tesla’s short sellers. For example, Seeking Alpha fellow contributor Montana Skeptic wrote:
If the South Australia deal were going to change the losing trajectory of Tesla Energy, wouldn’t Tesla be announcing the great news in a press release, accompanied by tweets from Musk? Of course it would, and of course, he would.
However, as convincing as these statements and main arguments of the article may seem at first glance, I believe that they fail to put the deal in a broader context and as a result provide a distorted view of the reality.
Let me explain this further in the following paragraphs.
Is money the only benefit Tesla gets from the Australian deal?
Certainly not. As Elon Musk emphasized on several occasions, Tesla’s mission is to accelerate the world’s transition to sustainable energy. In this sense, Tesla focuses on goals greater than making money every single quarter and therefore financial details of the latest giant battery deal in South Australia should be seen at least as important as the company’s reputation, credibility and expertise.
Apart from helping to solve Australia’s power problems, Tesla’s energy storage solutions also support numerous other applications such as electricity price optimization or availability of an emergency backup in the event of a grid interruption due to unexpected environmental disasters, which was the key rationale for building the world’s current largest battery system in Southern California.
With a constantly growing share of renewables in the global energy basket, the demand for energy storage systems will only rise. More and more commercial subjects will be looking to take an advantage of peak shaving, load shiftingand demand response features of energy storage systems and therefore Tesla needs to be building its brand in this sector from now on.
Was the tender non-standard by any standard measure?
Although the majority of media reported that there were 91 bidders on the project, 14 bidders were invited to provide more detail and five considered for detailed assessment, some observers suggest that the tender was rigged and “normal bidding procedures were sidestepped“. If this were true, some investigation would likely have been already launched and a tangible evidence would have been provided. Without any material testimonies, these allegations remain just false assumptions and Twitter photos will mean nothing more than Twitter photos.
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