Tesla Outage Performance: Impact On Tesla Stock

Key takeaways

• During a power outage, a Tesla owner can use a charged Tesla vehicle to power their home.
• Tesla Powerwall batteries are designed to provide uninterrupted power during an outage, in addition to energy-saving features.
• Recent long-term power outages in Texas highlight the added value of owning a Tesla or Powerwall during an outage.

After a recent winter storm, tens of thousands of homes in the Austin area went days without power. Following a recent string of major outages in Texas, some savvy homeowners with a Tesla in the garage turned their batteries in reverse, making Tesla an outage essential for some.

With a clear benefit of owning a Tesla car or Tesla Powerwall, either of which can power a home during a power outage, there’s a possibility that homeowners in outage-prone areas could prefer a Tesla when shopping for a new car, particularly after recent price cuts. After a period of questionable performance and lackluster attention from CEO Elon Musk, this could lead to a spike in demand for Teslas, driving up Tesla stock. Here’s a closer look at the potential of a Tesla stock increase thanks to Tesla outage features.

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Tesla vehicles and Powerwalls during power outages

While Tesla is best known for its flashy electric vehicles, it is a diversified company with energy products, including solar panels and roofing tiles, an in-home battery that can power a home during outages, and utility-scale battery systems designed to help cities and power companies manage fluctuating electricity demand.

During a power outage, two main products from Tesla can switch on to meet all energy needs of a home for a period of time.

• Tesla vehicles: Tesla cars usually plug into your home to charge the battery. During an outage, a Tesla vehicle can set its battery in reverse, providing energy to a home. The same is possible with EV brands, including vehicles from Ford and Chevrolet. The Ford F-150 Lightning officially offers home backup power, with a fully charged vehicle holding enough power to run a home for several days.
• Tesla Powerwall: The Powerwall is an in-home battery system that can charge using solar power or during off-peak energy hours, and then powers the home at night or during peak pricing periods. Powerwall batteries currently list for $12,850 on the Tesla website. Some homes are recommended to install multiple units to meet expected electricity demand.

While other EVs also use high-capacity batteries, it’s Tesla and Ford earning most of the headlines. That could lead to a spike in demand for EVs from both companies.

Extreme weather and power outage trends

Extreme weather conditions are commonplace in the United States. Harsh winter storms and major hurricanes occur with increasing frequency. If you’re experiencing power outages regularly, investing in a car or in-home battery to get you through may become much more attractive, despite the five-figure price tags.

Austin is on the heels of a multi-day outage impacting tens of thousands of households. Unfortunately, for many Texans, this isn’t a first-time experience. In February 2021, for example, major winter storms led to outages for more than 4.5 million homes and businesses.

The Texas power grid operates independently of the rest of the United States. The second most populous state also suffers from the most power outages, and of an increasing frequency. The most populated state, California, suffered from the third-highest number of blackouts during the same period.

Capturing potential profits from Tesla stock

The Q.ai team recently calculated that Tesla earns $51,726 in revenue per vehicle sold. Even considering recent price cuts, new Tesla models start at $43,490 for the Model 3, with base prices up to $109,990 for the Model X.

If Tesla outage performance leads to increased demand, its impressive profits should continue to grow. In 2022, the company earned a net income of $12.56 billion.

Assuming 10,000 new people decide to buy a Tesla for this reason, the company would earn more than $500 million in additional revenue. If Tesla sells an additional 100,000 units, it would recognize over $5 billion in additional revenue, which could significantly affect Tesla’s financial performance.

While that’s only a small fraction of the overall $81.46 billion earned in 2022, it’s also possible that many additional buyers will choose a Tesla due to its performance during extreme weather conditions. Investors have to wait for the next quarterly report to find out.

Energy storage revenue, which includes the Powerwall and utility-scale Megapack, only accounted for a little over $1 billion in 2022. There’s plenty of room for growth in this segment. Both homeowners and utility companies could benefit from high-capacity batteries.

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The bottom line

Tesla’s power outage performance is useful for investors to track, but it’s insufficient to move the needle of Tesla’s stock price at this point. However, with the potential of increased demand for the entire range of Tesla vehicles, and a major opportunity for growth in the Powerwall segment, Tesla’s bottom line could steadily increase due to extreme weather and outages.

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