Tesla hunts for new revenue in home storage batteries

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(Reuters) – Tesla Motors Inc shares slipped Thursday after a month-long surge ahead of Chief Executive Elon Musk’s expected announcement the money-losing electric luxury car maker will seek revenues from batteries for storing electricity at homes and businesses.

Musk and other Tesla officials have dropped a series of broad hints the past month about the topic of the announcement, which is scheduled for 8 p.m. Pacific time Thursday at a Tesla facility near Los Angeles.

Tesla shares are up about 20 percent since March 30, when Musk tweeted that the company would unveil a “major new Tesla product line – not a car.” Tesla shares were down about 1.7 percent Thursday hours ahead of the announcement in a broadly lower market.

Investor enthusiasm for Tesla’s entry into the stationary electricity storage business is driven by projections that selling Tesla batteries for homes and businesses to use as backup power systems could be important to building a sustainable future for Tesla’s car-making side, analysts say.

Deutsche Bank estimates sales of stationary battery storage systems for homes and commercial uses could yield as much as $4.5 billion in revenue for Tesla. Analysts expect Tesla will stationary storage systems around the same basic batteries it will produce for its vehicles at a large factory the company is building in Nevada.

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Stationary storage systems could be part of a fossil-fuel free lifestyle in which an individual has solar panels on the roof, generating electricity that can power appliances and recharge batteries in a Tesla Model S sedan parked in the garage.

Government subsidies and a dramatic drop in the price of lithium ion batteries are drawing more companies into the home electricity storage business.

Tesla has so far received $1.1 million from California’s Self-Generation Incentive Program. Tesla has received or is poised to receive state funding for about 600 storage projects in California, according to data from the state.

Though valued at just $200 million in 2012, the energy storage industry is expected to grow to $19 billion by 2017, according to firm IHS CERA.

Tesla and SolarCity will face competition for subsidy money. Coda Energy, which rose from the ashes of a failed EV maker and is owned by Fortress Investment, and startups backed by the likes of Total, GE and Siemens are going after shares of the stationary storage market.