Last week, Elon Musk announced his master plan to combine Tesla Motors (NASDAQ: TSLA) and SolarCity (NASDAQ:SCTY) into an industry-shifting energy conglomerate.
In this clip from the Industry Focus: Energy podcast, Sean O'Reilly talks to Foolish intern Ben Estep about the plan from an investor's perspective -- how to stay sane in the short-term as volatility soars, how strong the criticisms against Musk's ambitious plans are, and more.
A full transcript follows the video.
This podcast was recorded on July 21, 2016.
Sean O'Reilly: Bring it back around, this is The Motley Fool, we like the stock market investing. What do you think some key takeaways are for investors in Tesla, SolarCity, and possibly renewable energy future at large?
Ben Estep: I think at least looking at Tesla and SolarCity, it's definitely a long-term time frame, which we're usually big fans of here at the Fool. I think it's hard to say what's going to happen in the short term and I think a lot of his ambitions are going to be for five to 10 years down the road. I think holding those, if you're invested in those stocks you're really putting your faith in Elon Musk and his ability to execute his master plan. But I think beyond that there's a lot of interesting sectors and areas to look at for renewable energy, beyond the obvious companies like First Solar and other companies like GE that are focused on wind power and solar power.
But I think battery storage and energy solutions are going to be just as important of a component to investing in these sectors. I think a lot of companies that are focused on creating photovoltaic cells and wind energy, they are not as focused on the battery part. I think there's going to be some companies if you look, you know probably take some digging and understanding of the business, but I think there's some of these companies that could also be a great investment for the long term.
O'Reilly: Cool. Before we wrap up here, a criticism that has been lobbed at Musk and Tesla has been they're a little bit behind on some stuff. He's talking about building a bus and he hasn't even ramped up the Model 3 to the production that it needs to be to meet the arguably awesome pre-orders, it was like 400,000 or something. You nervous about that at all?
Estep: It has worried me at the same time, but I think one of the things I've been reading more about recently is reflexivity, both in a social sense and also in the economic sense, like that was something that George Soros really talked about, the ability of, as a stock price goes up it has the ability to influence the fundamentals and kind of create --
O'Reilly: Because you can raise money with the higher stock price and do stuff with the money.
Estep: Yeah, exactly! It kind of to some extent this self-fulfilling prophecy but I think Elon Musk is clearly a very driven visionary who I think it's not like, "Oh, shoot, we screwed up," he's stating his intentions because this is what he wants to do. I think if he wasn't as vocal and direct, I think he couldn't get his employees on board. Maybe even though he's promising these early production deliveries and those things, who knows? Maybe if he hadn't been as driven and promising these things, maybe it would have been two years more of a delay.
O'Reilly: Yeah. Okay, let's put you on the spot, we're going to do something before we leave. SpaceX is private, we can't invest in it -- sorry, Google can. You have the option, you can own a decent, have a decent chunk of your net worth in Tesla, SpaceX ... SolarCity's off the table now. Is that it?
Estep: Yeah, I guess it's pretty much.
O'Reilly: Okay. All right, so I apologize. Tesla or SpaceX, which would you rather have stock in?
Estep: I would say Tesla, just because I think SpaceX is really cool, I think they've done some phenomenal things but I think the long-term prospects that Tesla has, and not only that being ... If the acquisition of SolarCity goes through then they're going to be the largest solar panel producer in the world, also making the most efficient. I think for what they're doing they're pretty ahead of their time. I think it's going to be really hard for other companies to catch up to that.
Sean O'Reilly has no position in any stocks mentioned. Ben Estep has no position in any stocks mentioned. The Motley Fool owns shares of and recommends SolarCity and Tesla Motors. The Motley Fool owns shares of General Electric. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.