Tesla's renewable energy business could push company's worth into the trillions, billionaire Chamath Palihapitiya says

• Tesla's electric car business was "the first wave of growth" and will give way to a bigger focus on renewable energy, billionaire Chamath Palihapitiya said Wednesday.
• Elon Musk's company is "the leading hedge when it comes to electrification and decarbonization," and is worth trillions of dollars once investors price-in Tesla's growing energy businesses, he added on CNBC.
• Palihapitiya's comments arrive after Tesla reported second-quarter earnings that beat expectations. The automaker also notched a fourth-straight quarter of profitability.
• Watch Tesla trade live here.

Tesla's rapid growth can continue, but it won't just rely on electric cars, billionaire Chamath Palihapitiya said Thursday.

The Social Capital CEO and chairman of Virgin Galactic sees Tesla being worth trillions as investors shift from viewing the company as an automaker to a bet on green energy.

"This is no longer about cars, that's the first wave of growth," he said on CNBC. "I think people are pricing in an evisceration of traditional autos and an enormous shift to EVs, of which Tesla will get the disproportionate share."

He continued: "This is worth trillions of dollars."

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Elon Musk's company is on a winning streak with no signs of stopping. Tesla shares are up roughly 280% year-to-date and posted a record high on Monday. The company's second-quarter report released Wednesday showed the company topping Wall Street expectations and notching its fourth-straight quarterly profit. The achievement brings Tesla closer to being added to the S&P 500 index and further boosting its favor among investors.

The company's market cap stood at roughly $292 billion Thursday morning, with most of the gains led by Tesla's auto manufacturing business. Yet Palihapitiya sees the firm's energy businesses, including solar panel firm SolarCity and battery maker Megapack, driving growth moving forward.

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"It is the leading hedge when it comes to electrification and decarbonization," he said.

Tesla's expansion will only accelerate once more customers buy into its energy business. Utilities are among the "most predictable, reasonable businesses," and Tesla's business portfolio will democratize energy generation and storage as the country shifts further to promoting renewable energy, Palihapitiya said.

"I underwrite this stock as a bet towards decarbonization, towards unregulated energy, and towards the ability for all of us to become our little micro utilities," he added.

Tesla traded at $1,593.01 per share as of 10:35 a.m. ET Thursday.

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