Tesla Successfully Builds Largest Lithium-Ion Battery In Australia

Per Reuters, Tesla Inc. TSLA has completed installing the world's largest lithium-ion battery in South Australia. The construction was completed within 55 days from Sep 29, when the grid connection deal was signed.

In July, the company won a bid to construct 129 megawatt hour battery for Australia's most wind-energy dependent state i.e. South Australia. The company's CEO Elon Musk had pledged to install the battery within 100 days of signing the grid connection agreement. Otherwise the same would be given to the state for free.

At the time of signing the deal, Tesla had already installed half the battery packs.

Tesla Inc. Price and Consensus

Tesla Inc. Price and Consensus | Tesla Inc. Quote

The company's powerpacks have been installed at a wind farm in France's Neoen and are undergoing testing to offer grid security services. Per South Australia Energy Minister, the battery will be operational from Dec 1.

Of the total $390-million plan the state has sanctioned for diesel-fired generators to deal with frequent power cuts, it is yet to determine the amount to be paid to Tesla for the battery.

The country's energy sector already notified that the power supply will be tight, mainly in South Australia and the neighboring state of Victoria, as one of the biggest coal power plants was shut down in March.

Demand for lithium-ion batteries is expected to rise in the near future and the batteries are anticipated to be widely used in consumer electronic products as well as in electric cars to curb pollution.

Price Performance

In the last three months, shares of the company have underperformed the industry it belongs to. The stock has lost 8.7% against the industry's 7.7% gain during the period.

Zacks Rank & Key Picks

Tesla carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the auto space include Cummins Inc. CMI, BMW AG BAMXF and BorgWarner Inc. BWA. While Cummins sports a Zacks Rank #1 (Strong Buy), BMW and BorgWarner carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Cummins has an expected long-term growth rate of 12.2%. The stock has seen the Zacks Consensus Estimate for current-quarter earnings per share being revised 2.4% upward over the last 30 days.

BMW has an expected long-term growth rate of 4.2%. Over a year, shares of the company have been up 18.8%.

BorgWarner has an expected long-term growth rate of 9.1%. Its shares have been up 29.1% in the last six months.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

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