We all know that Tesla is selling battery packs and motors to Toyota and Mercedes for their electric cars. Tesla calls this their Development business. I think this is just the tip of the iceburg. In 5 years the Gen III car will be one of the hottest selling cars on the planet. That's because it will be safer, cheaper fuel costs, no emissions, cheaper maintenence, more storage capacity, quieter and smoother and more FUN to drive than any of it's competitors. And by then Tesla will be a household name associated with quality products. So if you are BMW or Honda or GM you will have to offer a competing product. They will be forced to either purchase a drivetrain from Tesla or license Tesla's IP to build their own.
Now, the big assumption in all of this is that no one is able to emulate Tesla's battery performance by then. Here's why I don't think that will happen: They've already tried and they have already failed. GM spent $1B and several years and all they came up with was the Volt. Nissan got a $2B loan from the U.S. DOE and all they could produce was an 80 mile range for the Leaf. No one has come anywhere close to Tesla's battery performance. And Tesla is in this position because of innovative research and design along with a BIG head start. They've been working on this for 10 years. So they are already that much further ahead than everyone else. And they are collecting propietary information about their current batteries at an amazingly fast rate. They are getting info from every Model S on the road and they will be using this data to expedite the advancements needed to improve battery performance. This is information other makers do not have access to.
Plus, Tesla has talked about selling drivetrains to fleet vehicles like delivery vans, freightliners and taxi cabs. That has the potential to dramatically increase it's Development revenue.
If I'm right, then there is a very large earnings potential that most future stock projections are not accounting for.