Credit Suisse : Tesla Has One Key Edge in its Electric Ambitions (TSLA)

If there is one thing that can be said for Tesla (NASDAQ: TSLA), it's that it is a resilient stock and a resilient operation. It's survived a serious short-selling attempt that ended up costing the short-sellers their shirt, assuming the value of a shirt is around $1.4 billion. The recent unveiling of the Cybertruck, which by most reports should have been a humiliation, has generated a string of pre-orders that represent significant short-term income for the company. Now, new word from Credit Suisse (NYSE: CS) suggests that there's one critical point for Tesla that may give it a key edge going forward, and it's got applications beyond the vehicle front.

That One Key Edge is One Mere Component

So what's the item that gives Tesla an actual edge in the electric vehicle market, and maybe even beyond? It's not the stock, and it's not the marketing. It's not even CEO Elon Musk himself. Credit Suisse is handing a lot of credit to one simple part of a Tesla vehicle that could make all the difference: the battery.

Recently, Credit Suisse's analyst Dan Levy took a trip out to Gigafactory 1, and by and large liked what he saw. There's a clear strategy at work that may allow Tesla to better compete with car companies that have been doing this for decades, but Credit Suisse still projects trouble possibly ahead for Tesla.

Levy made specific note of Tesla's battery technology and noted that Tesla was likely a front-runner in terms of batteries. Since batteries are the things that give electric vehicles not only their get-up-and-go but also their staying power, a killer battery array can mean the difference between a modernized golf cart and a car that can actually get drivers from point A to point B.

Tesla Banking on Battery Banks

Levy also noted that Tesla's overall battery capacity is actually on par with the biggest names in the field thus far. Tesla's total battery capacity is 44-gigawatt hours (GWh) as it sits, and that's only a spark behind the battery capacity of every other automaker on Earth combined, which represents 46 GWh.

What's more, Tesla is planning to take that advantage and run with it, planning to host what it calls “Powertrain Day”, a day that will focus on Tesla's unique battery capability, strategy, and beyond.

Not Enough to Change Minds, Though

Despite Levy's admission that Tesla's battery tech could be its real saving grace in the field, it wasn't enough to budge Levy on any previously-established points. Neither Tesla's rating nor its price target— down in the $200 range, which represents a loss of almost half of its current 374.72 value as of this writing—were altered by Levy's trip to Gigafactory 1. Levy instead noted that he was giving “...Tesla its credit where due.”

Credit Suisse isn't alone on this front, but it also has its share of disagreement out there. Morgan Stanley, for example, has a bull case for Tesla that goes all the way up to $500 per share. It also has a bear case for it dropping to just $10, which is one massive range, and suggests that even Morgan Stanley is puzzled by this company.

A Value Beyond the Car

A point somewhat less considered is that battery technology has applications beyond the car, and even Tesla has begun demonstrating this. Tesla's own Powerwall battery represents an advance in battery technology that's sufficient to shake up the market by itself. For those not familiar, the Powerwall battery is a battery designed to work as a whole-house battery backup. Two Powerwalls, according to Tesla, can work to provide continuous backup power for seven days or more based on estimated use of 30-kilowatt hours (kWh) per day.

The downside is that two Powerwall batteries represent a cost of $13,000, and that's before supporting hardware, solar charging, and installation costs. Yet the fact that Tesla has a battery that can function as a whole-house backup system represents a huge step forward in battery technology in general. Before this, solar panel users were left to use battery banks, arrays of typically deep-cycle batteries more commonly found in large boats. They weren't always easy to set up and maintain, but the Powerwall simplified the process significantly.

Naturally, the cost will be a huge impediment here. If Tesla can get the price down on the Powerwall—or something like it—to the point where it's more accessible to the common man, the end result will be a huge leap forward for Tesla. If its battery technology not only powers our cars but also our flashlights and our garbage disposals, the end result could send Tesla right through the roof.

It would almost be like owning a piece of the Edison light bulb, an ironic point to say the least. But a Tesla whose batteries are as ubiquitous as light bulbs would be a massive market force.