Tesla's new line of big, stackable batteries for homes and businesses started with a bang. The reservations reported in the first week are valued at roughly $800 million. If Tesla converts even a fraction of those into actual sales, the battery roll-out could measure up as one of the biggest ever for a new product category.
With the early sales of three breakthrough products: the original iPhone, released in 2007; Viagra's debut in 1998; and the introduction of the Tesla Model S battery-powered car in 2012. The iPhone surpassed $1 billion in sales by its third quarter on the market, while Viagra and the Model S needed a bit longer.
The new line of storage batteries is designed to extend solar power into the night and save companies money on its electric bills during expensive peak hours. Any comparison of batteries to smartphones and erection pills is, of course, a stretch.
Most of Tesla's battery revenue will come from utilities, not the consumers who snapped up iPhones and Viagra. The price of the new batteries is also much higher. Tesla's Powerwall units designed for home users cost $3,000 to $3,500 per unit, not including installation, while the commercial batteries are sold in roughly $25,000 incremental blocks. Tesla hasn't even defined what qualifies as a 'reservation' at this point.
Of the $800 million in reservations from the first week, almost $625 million came from businesses and utilities that would seem likely to complete the transaction. The remaining reservations from home users are little more than expressions of interest made through a no-strings online reservation system.
Manufacturing giant batteries will also be much more difficult to scale than Pfizer's little blue pill, which was filling 46,000 prescriptions a day by the end of its first month on the market. Tesla won't begin shipping batteries until this summer, and it's already sold out through mid-2016. Still, approaching $1 billion of interest, just days after introducing path-breaking product, marks a significant achievement.