Tesla-Beating Microcap Registers First Volume Order for Powerwall Rival
Last week I wrote to you about a tiny tech company whose line of Powerwall-rivaling domestic energy storage units is now threatening Tesla's (NASDAQ: TSLA) domination of the home battery market.
This week, that very same company hit a major milestone in its corporate life cycle when it announced its very first volume order for these units, to be delivered for the Australian residential market.
Since last week's Wealth Daily, shares of this company have appreciated a robust 23%.
With the Australian deal acting as a kind of pilot for this emerging company's impressive technology, more news, more orders, and a steadily growing market share are going to dictate the stock's trajectory for the next several months.
Beyond then, it's hard to say where this thing will go, but given the demand, the general trend toward more and more power grid independence, and the rapid growth in popularity of electric vehicles — which dovetail with domestic power storage — it's not unreasonable to expect this company to rise from microcap to midcap in the space of just a few years.
Though growth in the domestic power storage market has been impressive since the beginning of this decade, market analysts agree that we're still in the very early stages.
The Way of the Future: Compartmentalized Power Grids
Here is what the future will look like here in the United States:
Up until now, however, this future looked to be the likely domain of Elon Musk's Tesla, which is now planning to expand its collection of Gigafactories from one to three and then, in the next several years, to as many as 20 to meet global demand for its batteries.
The problem with this plan, however, is that despite Musk's brilliant marketing plan, there is a basic flaw with the product: It lacks a power control system necessary to make it operate.
Essentially, the batteries are bodies without brains.
For a steady supply of those brains, Tesla goes to a third-party producer.
All Show and No Flow (of Electrons)
That flaw caused one of Tesla's biggest partners — one of the three major German carmakers — to drop Tesla and start doing business with the very company I initially wrote about last week.
At right around 1/2,000 the market cap of the $60 billion Tesla, this upstart shouldn't have been much of a threat to the American tech giant.
Nevertheless, the loss of that automotive partner provided Tesla's shareholders with a nasty wakeup call last year.
This week's announcement that over $2 million worth of sales were now on the books should be viewed as a second wakeup call.
Or perhaps an all-out declaration of war.
In the tech industry, the situation playing out here is referred to as "disruption."
It's a scenario where a small, largely undiscovered idea or concept comes around and destroys the status quo to establish itself as the new standard.
Examples of the phenomenon include what Apple (NASDAQ: AAPL) did to the cell phone when it introduced the iPhone and what Facebook (NASDAQ: FB) did to social media, or what Tesla appeared to do to the centralized power grid when Elon Musk proudly announced the Powerwall back in 2014.
His talents for hype marketing definitely gave the then-infant industry a shot in the arm, but ultimately what all of that bluster really did was roll out the red carpet for a superior competitor.
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Build It Better, But Also Build It Cheaper
For homeowners who have renewable power generation on their property, such as solar panels or a residential wind turbine, a power storage system is essential.
But even for those who simply want to be able to control how and when they buy power, by having localized storage capacity, these big lithium batteries present a money-saving, disaster-resistant solution.
However, another stumbling block for Tesla in the mass commercialization of its Powerwall is the price tag.
Costing around $10K for the needs of an average American house, the systems target wealthier clients by default.
This smaller competing company lands another punch by offering a more complete, more compact, more efficient, and, yes, much cheaper product.
Thanks to this added level of accessibility, in the next decade, batteries like these will become common household appliances, appealing and affordable not just to the wealthy, but to middle-class consumers as well.
Right now it's an investment opportunity for the future-minded investor, but, in the years to come, this may go down as one of the most important product launches in recent memory.
To get the whole back story, along with the name and ticker symbol of this company, check out the full presentation I recently published on this company.
It's 100% free and available instantly. Just click here.
Fortune favors the bold,
Coming to us from an already impressive career as an independent trader and private investor, Alex's specialty is in the often misunderstood but highly profitable development-stage microcap sector. Focusing on young, aggressive, innovative biotech and technology firms from the U.S. and Canada, Alex has built a track record most Wall Street hedge funders would envy. Alex contributes his thoughts and insights regularly to Wealth Daily. To learn more about Alex, click here.
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