For Tesla (ticker: TSLA) CEO Elon Musk, Twitter is about much more than socializing with friends and checking in on the lives of favorite celebrities. On Friday, Musk confirmed Tesla has finalized a deal first pitched on Twitter to build the world’s largest grid-scale lithium-ion battery in Australia within 100 days.
The catch is that if the deal isn’t completed by the deadline, the project is free, a promise Musk made back in March when he originally pitched the idea to Australian Atlassian co-founder Mike Cannon-Brookes.
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“If I can make the $ happen (& politics), can you guarantee the 100MW [capacity] in 100 days?” Cannon-Brooks tweeted at Musk.
“Tesla will get the system installed and working 100 days from contract signature or it is free. That serious enough for you?” Musk replied.
The 100-day clock started ticking this week, as Musk confirmed on Friday that the deal is official. The battery will serve as crucial back-up power for South Australia, which has been plagued by outages in recent years.
TSLA shareholders have a lot riding on the project. Cash-strapped Tesla can’t afford to lose the “$50 million or more” Musk says the company stands to lose if the project is not completed on time.
But perhaps more important for Tesla investors is the reassurance that delivering on such a tight deadline would provide. Tesla critics have been extremely skeptical of Musk’s production targets for the Model 3, which began production this week. The first Model 3 is expected to be completed on Friday, but Musk said production will ramp to 100 vehicles in August, 1,500 in September and 20,00 per month by the end of 2017.
On Wednesday, Goldman Sachs analyst David Tamberrino said Tesla’s production guidance is too aggressive and lowered the TSLA stock price target from $190 to $180.
“Overall, we still harbor supply chain concerns and believe a more prudent curve is warranted given historical operational execution,” Tamberrino says.
On Friday, IHS Markit reported that registrations of Tesla vehicles in California declined 24 percent year-over-year in April, supporting Goldman’s claims that demand for Model X and Model S is “plateauing.”
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If that claim is true, Tesla investors have even more riding on the Model 3 rollout. If the company fails to deliver on its battery pledge within 100 days, Tesla investors may have cause for concern about the Model 3 targets as well.
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Tesla?s 100-Day Battery Pledge Comes at a Critical Time originally appeared on usnews.com
