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Can Tesla Save The World?

Can Tesla (TSLA) Save The World?

Operation Blue Star Partner – Tesla

“Going from PayPal, I thought: ‘Well, what are some of the other problems that are likely to most affect the future of humanity?' Not from the perspective, ‘What's the best way to make money?'” – Elon Musk

Operation Blue Star was a plan by Tesla (TSLA) to manufacturer electric cars for the masses. Right now the Tesla cars are dependant on a fairly expensive battery. And if you watched the 60 Minutes special on Elon Musk, Tesla's founder, you'd have an idea of the challenges they face manufacturing affordable cars. It comes down to the battery.

While a worthy cause, pumping out a purely electric car, eco-friendly, independent of fossil fuels with a long lasting battery is a challenge faced by anyone in the market. However, Elon Musk is on mission to do just that. And this is where Tesla's silent partner comes in.  But, I don't thing they are that silent. Read more to find out who it is.

Operation Blue Star is now referred to as the “Third Generation Vehicle.” Tesla wants to be able to mass produce a $30,000 to $40,000 vehicle. Currently, battery costs, make this prohibitive. It is said by Tesla owners, that the replacement cost of a battery is as much as $30,000. That's the cost of their “Third Generation Vehicle” alone.

Tesla's cars, though, are pretty cool. Watch this video how Tesla Model S stacks up against the Mercedes new S Class.

Both are impressive cars, however, Tesla is cutting edge technology and hopefully the beginnings of the future of transportation.

“There's a fundamental difference, if you look into the future, between a humanity that is a space-faring civilization, that's out there exploring the stars … compared with one where we are forever confined to Earth until some eventual extinction event.” – Elon Musk

Elon Musk was a co-founder of Paypal and also founded Space X, which stemmed from his childhood vision of sending a self sustaining greenhouse to Mars. Both companies were founded from a noble ambition of saving the Earth. Basically, to colonize Mars and eliminating our dangerous carbon footprint, for real.  Driving your car forever on free sunlight.

As an FYI, Space X is the only private company (that I know of) to successfully launch a vehicle into Earth's orbit and land it back on Earth. Pretty cool, and seemingly could be the milestone moment in commercial space flight.

TSLA, as you can imagine, is focusing heavily into battery research. The ideal situation would be to have a lightweight, affordable battery cell that can hold a charge for an extended period of time.

Musk's vision goes well beyond cars, and for his vision to be realized he is going to build a massive battery factory. Something he calls “Gigafactories”.

If successful, the impact of the Gigafactory will be felt across multiple industries and have a $ multi-billion affect on the market place. Industries such as utilities, electronics and transportation, to name few, would be potentially transformed in short order. The Gigafactory could pose a threat to some businesses, and as such could face some obstacles along the way. But who wants to stand in the way of progress?

This massive undertaking will require excessive capital to launch, and this where Tesla and Musk needs partners, and friends. It looks as though long time partner and ally Panasonic is stepping up to the plate.  Yep, good old Panasonic, the creator of my first tape cassette player, all but forgotten. The saying “out of sight, out of mind” pops up here, and the name Panasonic may be heard a lot more frequently moving forward.

Panasonic is actually trading on the Pink Sheets, they moved off the big board in order to save money. As we know reporting requirements for listing on US markets, can quite expensive, possibly overly so. Currently trading in the $10-12 range, the stock actually gets some decent volume.

It is likely that both players will be doing rounds of fund raising, so a good questions to have answered moving forward is, “who else will participate? ” This could open the door for smaller players to get involved, and pose some great investment opportunities. Small companies working on new battery technologies could be a worthy topic to investigate further.

According to Frost & Sullivan, the global market for lithium-ion batteries is expected to double to $22.5 billion in 2016 from $11.7 billion in 2012. Consumer goods and automobile sectors are driving the demand.

Two players in the battery sector to keep an eye on are:

1. Arotech Corp (ARTX):  Arotech Corporation is a defense and security products and services company, engaged in three business areas: interactive simulation for military, law enforcement and commercial markets; batteries and charging systems for the military. It operates primarily through its various subsidiaries, which it had organized into two divisions. It manufactures and sells lithium and Zinc-Air batteries for defense and security products and other military applications through its Battery and Power Systems Division. In April 2014, the Company acquired UEC Electronics, LLC, a company based in Hanahan, South Carolina.

2. Enersys (ENS): EnerSys, incorporated on October 13, 2000, is a manufacturer, marketer and distributor of industrial batteries. The Company also manufacture, market and distribute related products such as chargers, power equipment and battery accessories, and the Company provides related after-market and customer-support services for industrial batteries. The Company has two primary industrial battery product lines: reserve power products and motive power products. The Company operates in three business segments: Americas, which includes North and South America; Europe, which includes Europe, the Middle East and Africa, and Asia, which includes Asia, Australia and Oceania. In October 2013, EnerSys completed the acquisition of Purcell Systems, Inc. In January 2014, EnerSys completed the acquisition of UTS Holdings Sdn. Bhd.

Additional companies to keep an eye on:

Some times, the most lucrative investment opportunities are those you find on the fringes. While large companies get all the press, its those small players who participate in that large venture that provide the largest ROI.   Those small guys you don't normally hear about until its too late. Many times, these are penny stocks, those stocks trading under $10, $5 and even well under $1.

“If something is important enough, even if the odds are against you, you should still do it.” – Elon Musk

And with that we will dedicate this song to Elon Musk, a true Modern Day Cowboy


Quote Source: Business Insider

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Written by John Thomas

I began my investing career back in 1998. I quickly discovered day trading, small cap and penny stocks. I was the editor of my own investment newsletter, stock promoter, investor relations, public relations and have witnessed the back-end process of taking a private company public through reverse merger and registration. That is roughly over a decade in a nutshell. During this time I learned how to identify the rats, sharks and people who truly want to help you learn about investing. Now I do research and write.
My hope is to pass along nuggets of information that could help or the very least entertain you on your way to financial success.

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