To be fair, there’s no doubt that Elon Musk is a genius. Tesla and SpaceX are two of the most exciting companies on the planet and they’re doing incredibly important and groundbreaking work in the fields of electric cars and space exploration, respectively. There’s no way either of those companies would have come as far as they have without Musk pushing his engineers to their limits — one anonymous SpaceX engineer, for instance, says Musk has a “reality distortion field” on par with Steve Jobs.
That said, there are limits to reality distortion and I think Musk may have hit them this week. As MarketWatch informs us, Musk on Wednesday said that he sees Tesla’s market cap in 10 years matching where Apple’s is right now. In case you don’t know, Apple is now valued north of $700 billion and it closed trading on Wednesday worth more than Google and Microsoft combined.
To be fair, if Steve Jobs had said in 2005 that Apple would be worth $700 billion by 2015, I would have thought him delusional as well. But just as Apple would never have reached its current heights if it had relied exclusively on Macs and iPods, I think Tesla will need something besides cars if it’s really going to become a tech powerhouse like Musk thinks it will.
Part of the answer may be the home energy storage market. Bloomberg reports that Tesla is working on a lithium-ion battery for homes and businesses to store energy generated by solar panels and other supplemental sources.
“Combining solar panels with large, efficient batteries could allow some homeowners to avoid buying electricity from utilities,” Bloomberg explains. “Morgan Stanley said last year that Tesla’s energy-storage product could be ‘disruptive’ in the U.S. and in Europe as customers seek to avoid utility fees by going ‘off-grid.’ Musk said the product unveiling would occur within the next month or two.”
It’s obviously still a long way from here to a $700 billion market cap but I do think branching out from cars and moving into the home energy market would be a very smart move on Tesla’s part. And even if this particular venture happens to be successful, it doesn’t preclude the possibility that Musk may be equal parts genius and delusional.