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Nissan-Eaton Partnership Another Example Of Tesla's Innovation Impact

Tesla Motors, Inc. NASDAQ:TSLA, Eaton Corporation NYSE:ETN - Nissan-Eaton Partnership Another Example Of Tesla's Innovation Impact

Innovation from Tesla Motors Inc TSLA 0.58% is having a huge impact on its competitors and the recent partnership of Nissan Motor Co Ltd (ADR) NSANY 0.52% and Eaton Corporation, PLC Ordinary Shares ETN 0.81% is a proof of this.

Nissan and Eaton announced a new residential energy storage unit, powered by the recycled batteries from Nissan Leaf electric vehicles. The xStorage system will be powered by twelve Nissan EV battery modules.

The xStorage will directly compete with Tesla's Powerwall lithium-ion wall-mounted battery. Tesla's Powerwall comes in 6.4 kilowatt hour (kWh) and sells for $3,000, while xStorage will have a capacity of 4.2KWh and would be sold for €4,000 (about $4,553) in UK.

"Another example of TSLA innovation validating the market for competition," Detwiler Fenton wrote in a note. Available to pre-order from September 2016, the unit will also have a smartphone app that will allow consumers to change energy sources.

"While there are currently no U.S. distribution plans, this is yet another example of a competitor finding its way into the stationary storage game," the note added.

Nissan and Eaton expect to sell more than 100,000 xStorage units within the next five years.

"Our policy is to avoid hidden extra costs and achieve a lower total cost of ownership than other major offers already announced," Eaton Electrical EMEA's VP of Marketing, Cyrille Brisson, said in a statement.

Detwiler Fenton said, "When he refers to the other 'major offers,' we can guess who he's talking about."

The note pointed out Tesla's recent report showing $44 million of battery orders for on-site storage from SolarCity Corp SCTY 1.37% this year.

"While there aren't enough used Leaf batteries out there at present to make a difference, at 170,000 today, the numbers may add up over time and the business model is worth paying attention to," the note added.

Shares of Eaton were down 0.50 percent to $61.69. ADRs of Nissan rose 3.69 percent to $18.85.

DateFirmActionFromTo
May 2016Dougherty & CompanyAssumesBuy
May 2016BairdMaintainsOutperform
May 2016Deutsche BankMaintainsHold

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