Why This Analyst Feels Tesla Is Grossly Overestimating Energy Storage Prospects

Tesla Inc TSLA reported record deliveries in China and is now facing moves by Beijing to stop EV price cuts.

The company's energy generation and storage business has expanded significantly due to the phenomenal growth of energy storage system (ESS) batteries, according to Bernstein.

The Tesla Analyst: Bernstein's Toni Sacconaghi maintained an Underperform rating and price target of $150.

The Tesla Solar Thesis: The ESS market could grow to about 700GWh annual deployment by 2030, which is less than a third of what Tesla is forecasting, Sacconaghi said in a note.

Check out other analyst stock ratings.

“Additionally, Tesla appears to be assuming 43% global ESS market share,” the analyst wrote. “Given the competitive nature of the business, we assume 15% share."

Tesla's ESS volumes are likely to be around 10% of what the EV makers “appears to be forecasting” for 2030, Sacconaghi further mentioned.

TSLA Price Action: Shares of Tesla had risen by 0.93% to $279.11 at the time of publishing Friday.

Image: Tesla