The CEO of Tesla Motors, Elon Musk, had always been very successful. During the past 15 years, he co-founded PayPal, established Tesla, founded SpaceX, and played a key role in the establishment of SolarCity. And Last year, he managed to keep the whole world trying to guess where he would place his company’s battery manufacturing Gigafactory, which, when complete in 2017, is supposed to produce a lot more lithium-ion (Li-ion) batteries than what is being produced nowadays worldwide. By aiming to attain such a huge production capacity, Musk believes that Tesla would drive down battery costs by 30 %. Today, we all know that the Gigafactory will be located near Reno, in Nevada, and is going to cost $5 billion to build.
The story thickened several weeks ago, as Musk declared that Tesla was intending to create a battery for home market. Business reporters had been quick to note how troublesome those batteries could be to the already established energy industry out there, especially when coupled with SolarCity’s PV panels.
On another hand, selling batteries to home owners won’t be that easy, that’s a fact. There’s a good reason why very few of us have big battery banks in our households, it is not because there are running out of the market, but because battery packs are very pricey, and the benefits they provide home owners tend to be very limited. Most home owners with PV panels get most of the potential benefits other batteries can possibly provide by connecting their panels to the power grid at very little to no cost. For home owners with no solar panels, the power grid in many areas is sufficiently reliable, making it useless to opt for a battery backup. With that being said, if Musk is going to promote those batteries, he definitely will need to sell them more cheaply than actual prices, and it’s unclear whether a 30 % cost reduction will be enough.
Actually, Musk is not the 1st company executive to make impressive promises about such a renewable energy product and then try so hard to keep his promises. Although it may seem challenging for many companies to launch in that field of industry, with no guarantees and unsure long-term results, many have already joined the same boat as Tesla. On about the same day that Musk revealed the Tesla home battery project, Steve Levine, a reporter and a Georgetown University’s adjunct professor, published a book entitled “The Powerhouse”. It narrates the story of Envia, the battery manufacturing start-up, whose product was promoted in 2012 as a major discovery by the Advanced Research Projects Agency for Energy (ARPA-E); the government’s power technology incubator. GM has as well joined the race, spending at least $7 million, adding up to the $4 million provided by ARPA-E. Unfortunately, it failed to keep its promise, and GM’s engineers decided that the Envia battery couldn’t attain the performance stated by the company. Furthermore, there had been accusations that Envia did not own many of the technologies on which its battery was created. Towards the end of 2013, GM moved out from the deal.
That introduces us to a critical question: If Tesla’s fate would be different from Envia’s, and would finally be able to commercialize its batteries, which corporations and companies would benefit considerably from the improved innovation and enhanced production of Tesla batteries. Actually many companies are active in the field of lithium batteries, and thus can benefit tremendously for Tesla’s innovation, we can list for example:
– Polypore International: a company that produces microporous filters used in the industry of lithium-ion batteries which are used in a number of applications such as smartphones, laptops, and other customer devices.
– Western Lithium USA Corporation; a lithium miner located in Canada, and indexed on the Toronto Stock Exchange. This company is presently taking part in the development of a leading lithium reserve in Nevada,
– Rockwood Holdings, which is a varied chemicals’ company, and one of the most important manufacturers of lithium-based products and is eligible to benefit from a worldwide rise in demand for lithium. The manufacturer has been praised for its good hand in the international supply of lithium used in battery packs for a broad selection of electronics, as well as for use in the industry of electric vehicles.
– Panasonic Corporation: this Japanese electronics leader with $88 billion in profits last year, is one of the biggest suppliers of complete battery packs for a range of sectors from device producers to power companies. Panasonic has typically been a real giant in battery development because of its size, which allows it to absorb the massive R&D expenses included. The manufacturer is now in a 4-year contract with Tesla to create and manufacture parts utilized in Model S battery packs.
– SolarCity Corporation: this company shares its origins with Tesla Motors, as well as its CEOs. In November 2014, SolarCity and Tesla established a contract to build and produce backup energy storage for household solar systems. This has led experts to believe that once the Gigafactory is complete and fully functional, SolarCity and Tesla together have the chance to break up a beneficial and profitable industry – power.
Gordon's expertise in the area of industrial energy efficiency and alternative energy. He is an experienced electrical engineer with a Masters degree in Alternative Energy technology. He is the co-founder of several renewable energy media sites including Solar Thermal Magazine.