Tesla and SolarCity: Harbingers of Future Mobility and Energy
In Leonardo DiCaprio’s new documentary film, “Before the Flood,” DiCaprio walks the floor of Tesla’s new Gigafactory while he talks with Elon Musk about the future of energy and mobility. Elon Musk is a brilliant visionary. As CEO of Tesla, he has made a reality of his vision of electric self-driving cars. He is also Chairman and a major shareholder of SolarCity, the leader of solar-as-a-service. With no money down, in sunny areas, solar can be added to the roof of a home or building and the electricity bill lowered.
On November 17, Tesla and SolarCity shareholders finish voting to approve Tesla’s purchase of SolarCity (disclosure: I own stock in SCTY). By combining the companies, Musk is convinced that he can transform mobility and energy:
“The acquisition of SolarCity will create the world’s only integrated sustainable energy company, from energy generation to storage to transportation. Just as Tesla has demonstrated the superiority of electric vehicles, the solar roof and Powerwall 2 will transform energy generation and storage.”
Executives of other car companies are stunned with the success of electric cars and ridesharing. General Motors is valued at more than Tesla, but less than Uber. Every auto CEO that wants to keep her job is now serious about electric cars and self-driving.
Executives of big electric utilities watch with similar apprehension as solar-plus-storage threatens their central-power-plant monopolies. Yes, there is a war on coal, and it’s being won by solar, wind, storage, and natural gas.
SolarCity has been on the winning side of the energy war; Tesla on the winning side of mobility. Together they will help create a brighter future with cleaner air, less climate extremes, reliable and affordable energy, safer and faster mobility. The combined company would design, manufacture, sell, install, service, finance, and offer on-demand energy and mobility.
Such ambitions require more billions of dollars, as both Tesla and SolarCity burn through billions as they rapidly build their businesses. Stock analysts debate about whether Tesla stock is a buy or a bet on a company doomed to failure. Top Wall Street analyst, Oppenheimer’s Colin Rusch, opines that after the merger Tesla would need $12.5 billion through 2018 raised with a combination of asset-based debt, system refinancing, tax equity and corporate debt. Yet, this October Tesla surprised Wall Street with a profit and Musk claims that no new cash need be raised.
Tesla Electric Cars and Gigafactories
More than one million electric vehicles are now on the road.
By December 2015, Tesla delivered 100,000 electric cars that average around $100,000. Soon they will have delivered a total of 200,000. These luxury cars are beautiful and have electric ranges of at least 250 miles per charge.
Tesla has deposits for 400,000 new Model 3 electric cars, which start at $35,000 with tax credits. Model 3 is the most successful product launch in history. No other product has this quickly garnered orders worth over $10 billion, not the computer, the television, or the iPhone.
For an added $8,000, any new Tesla can include the option to be fully self-driving, for example, driven from Washington DC to New York without ever touching the steering wheel from garage to parking lot. Tesla is the leader in electric cars, self-driving cars, connected cars, and luxury cars. BI Intelligence expects, “94 million connected cars to ship in 2021, and for 82% of all cars shipped in that year to be connected.”
The Tesla Gigafactory is the largest battery-manufacturing site in the world. Based near Reno, Nevada, the factory is bigger than any in Japan, Korea, or in China. By 2020, the factory is projected to produce 35 GW of lithium battery cells and 50 GWh of battery packs for cars, solar homes, and buildings to optimize energy use.
Thanks to economies of scale, electric cars keep getting less expensive to make. They are already less expensive to fuel and operate than conventional vehicles. I have never spent over $35 per month fueling my older Nissan LEAF or new Chevrolet Volt. Some will buy these electric cars, others lease, and many will use them in ridesharing services from Uber, Lyft, and new competitors like Tesla.
Tesla is also a computer science company, with years of millions of lines of software code to optimize the many computers within a car, gigabytes of big data, and deep learning that enables self-driving. This core competency in computer science will also help the new combined company go beyond batteries into intelligent energy management and to compete with Uber in mobility on demand.
SolarCity and future of solar + storage
SolarCity has installed solar roofs on more than 300,000 homes and commercial rooftops. The homeowner often makes no down payment, instead agreeing to a power purchase agreement or lease. Some of these existing customers and many new customers are also interested in battery storage, car charging, efficient hot water heating, and home energy management.
Tesla recently unveiled Powerwall 2, a new 7 kW, 14 kWh battery system priced at $5,500 with integrated solar inverter and electric vehicle charger. Tesla technology will accelerate the installation of solar plus storage, all electric homes, and zero net-energy homes.
Most homes use natural gas for heating, hot water and cooking. As I discussed in my article “Unnatural Gas,” natural gas is methane, a greenhouse gas that traps 25 times the heat of CO2. From fracking, to storage, to pipeline delivery, leaks are damaging our future. It is too expensive to ship methane to Hawaii, so all-electric homes are the norm. In the islands, SolarCity is installing solar roofs combined with Tesla battery storage, electric smart water heaters, and Nest thermostats to manage efficiency.
Solar plus storage will be at the heart of zero net-energy (ZNE) homes, buildings and communities. Starting in 2020, new single-family homes in California must be ZNE. Starting in 2030, new commercial buildings, including apartments, in California must be ZNE. California, by law, will get 50 percent of its energy from renewables by 2030. ZNE is a major opportunity for the combined Tesla.
Tesla, in partnership with Panasonic, has ambitions to complete a massive solar factory in Buffalo, New York, that would make one GW of solar annually, with ambitions to scale to 10 GW to make it the world’s largest solar manufacturing site.
Tesla recently generated interest with new roofing material that integrates solar. Instead of solar mounted on a roof, your roof would be solar. Yet, as Tesla enters the solar integrated roof business, Dow Chemical leaves the solar shingle business. So far, many attempts at building-integrated photovoltaics have failed to make money and failed to generate the energy per square-foot of conventional solar.
A solar roof is a compelling vision. Initial success might be in luxury homes and projects with ambitions for architectural awards where cost and PV efficiency are secondary. In the U.S., five million new roofs are installed annually; two percent is 100,000 solar roofs annually. Add solar-plus-storage, and we accelerate ZNE homes and buildings.
The Future of Energy and Mobility
In the future, our homes, buildings and cars will be completely electrified, smart, and powered with renewable energy. An electric car is 90 percent energy efficiency, compared to 15 percent for a gasoline car. New electric homes will increasingly be zero net energy, incorporating solar power, smart electric water heating, an advanced battery, and intelligence everywhere.
By acquiring SolarCity, Tesla is building a company to supply our smart electric future. No doubt that it may hit a cash crunch in pursuing its ambitions. Competition will be intense. Who ever wins as our suppliers, all of us will win with smart electric cities where it is easier to travel between our zero net-energy homes and ZNE places of work.
Leave your comment below, or reply to others.
Please note that this comment section is for thoughtful, on-topic discussions. Admin approval is required for all comments. Your comment may be edited if it contains grammatical errors. Low effort, self-promotional, or impolite comments will be deleted.
Read more from MeetingoftheMinds.org
Spotlighting innovations in urban sustainability and connected technology
I see the outcomes of Duke Pond as a representation of the importance of the profession of landscape architecture in today’s world. Once obscured by the glaring light and booming voice long-generated by building architects, landscape architects are steadily emerging as the designers needed to tackle complex 21st century problems. As both leaders and collaborators, their work is addressing the effects of rising sea level on coastal cities, creating multi-modal pedestrian and vehicular transportation systems to reduce carbon emissions, reimagining outdated infrastructure as great urban places, and as with the case of Duke Pond, mitigating the impacts of worsening drought.
AI has enormous potential to improve the lives of billions of people living in cities and facing a multitude of challenges. However, a blind focus on the technological issues is not sufficient. We are already starting to see a moderation of the technocentric view of algorithmic salvation in New York City, which is the first city in the world to appoint a chief algorithm officer.
There are 7 primary forces determining the success of AI, of which technology is just one. Cities must realize that AI is not the quick technological fix that vendors sell. Not everything will be improved by creating more algorithms and technical prowess. We need to develop a more holistic approach to implementing AI in cities in order to harness the immense potential. We need to create a way to consider each of the seven forces when cities plan for the use of AI.
In New Zealand, persistent, concentrated advocacy and legal cases advanced by Māori people are inspiring biocentric policies; that is, those which recognize that people and nature, including living and non-living elements, are part of an interconnected whole. Along the way, tribal leaders and advocates are successfully making the case that nature; whole systems of rivers, lakes, forests, mountains, and more, deserves legal standing to ensure its protection. An early legislative “win” granted personhood status to the Te Urewera forest in 2014, which codified into law these moving lines:
“Te Urewera is ancient and enduring, a fortress of nature, alive with history; its scenery is abundant with mystery, adventure, and remote beauty … Te Urewera has an identity in and of itself, inspiring people to commit to its care.”
The Te Urewera Act of 2014 did more than redefine how a forest would be managed, it pushed forward the practical expression of a new policy paradigm.