TESLA – an ambassador of sustainable future.

Tesla completely changed the transportation industry, but nowadays it is not only a producer of electric cars, it is a company, that forces other industries move towards sustainable future.

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Transportation has a huge impact on the planet: the global car fleet consists from more than 1.2 billion vehicles1 with over 72 million2 of new vehicles were sold in 2015 only. This huge number of cars creates enormous negative effect to the atmosphere not only by emitting CO2 itself, but also creating demand for continuing oil extraction and energy, needed for its production.

Carbon Dioxide Emissions From Energy Consumption by Sector in the U.S.
(million metric tons of carbon dioxide)

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One of the biggest problems in the sector is its inability to change fast – without any external measures people change cars in 3 to 5 years in developed countries and even more rarely in developing. This naturally affects the fleet replacing rate and the whole industry dynamics.  Thus, to force the speed of industry changes companies need to introduce disruptive innovations, while governments should put in place new legislation and policy incentives. Many countries have already started introducing new regulations and tax preferences in favor of electric vehicles (EV). Norway, for example, introduce the plan to ban petrol/diesel fueled cars by 2025. Car manufacturers also actively changing their business model and announced roll out of more than one fully electric car by 2020-2025 (Exhibit 1). All leading car manufacturers revised their business strategy and plans after seeing success of Tesla motors – the company that first revealed EV to the market.

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Tesla was the first company, which could resolve (or partly resolve) the key issues of EV, which made this type of transportation not an attractive option before:

  • Low range per one charge;
  • Lack of infrastructure;
  • Long time to charge the battery;
  • Ugly style and poor performance
  • High price.

Tesla engineers and designers were able to make a car with comfort range (218 miles per charge) for everyday usage, they make it drive fast and fun and put it into a really good looking body. Moreover, Tesla leadership decided to build their own infrastructure – chain of battery refueling stations across the world – Superchargers, which will allow Tesla drivers to charge their cars for free, or to replace the battery for a time and cost, comparable to the that of fueling a full tank of petroleum.

Map of Tesla Supercharger stations in the U.S. in 20165.
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High prices – that the problem, which was only partly resolved, as original Tesla Model S prices starts from $66,000. To resolve this challenge, earlier this year the company presented the new affordable model – Tesla Model 3, which costs $35,000. Just for 2 weeks after this presentation, Tesla received almost 400,000 reservations3, which shows a genuine interest in that kind of vehicle.

Tesla reached unbelievable results in achieving their mission “To accelerate the world’s transition to sustainable transportation”, but electric cars alone won’t save the world4. To make our future sustainable we have to move to zero-emission energy generation, such as solar, wind, hydro and nuclear power.

Being a leader of change, Tesla recently announced a changed mission, replacing the word “Transportation” by the word “Energy”. Tesla disrupted the transportation industry, forcing the industry leaders to revise their strategies and now it steps forward to the energy industry plateau. Now Tesla makes batteries, and will be making much more after the completion of its joint (with Panasonic) project – Gigafactory. Tesla has entered the home energy system by introducing its energy storage product – Powerwall. Tesla CEO – Elon Musk also recently announced the acquisition of SolarCity, which will add solar panels into Tesla’s services. Soon after that he presented Tesla’s solar roof7 – the new approach to solar panels and a new way to make people’s life more sustainable in the future. Company is definitely moving in the direction of integration into different businesses through the supply chain to make the life of people renewable and emission-free. The ideal future, pictured by Elon Musk is a house with a Tesla in the garage, a Tesla solar roof on the house, and a Tesla Energy Powerwall storing the juice to power it all. Being a disruptive leader of sustainable development, by creating such solutions, Tesla will force other energy industry leaders to change to beat the climate change challenge!

  

Exhibit 1. EV plans of leading car manufacturers7.

tesla-6 2017, Chevrolet Bolt (GM), 238 miles range
tesla-7 2016, BMW i3
2021, 2 new EVs
tesla-8 2020, Mercedes-Benz: 2 EV SUVs and 2 EVs sedans
tesla-9 2020, Ford: 13 EVs
tesla-10 2018, Audi EV SUV, 250 miles range + 2 more EVs by 2020
2025, VW: 30 new EVs

 

1 http://www.greencarreports.com/ news/1093560_1-2-billion-vehicles-on-worlds- roads-now-2-billion-by-2035-report

2 https://www.statista.com/statistics/200002/ international-car-sales-since-1990/

3 http://fortune.com/2016/04/15/tesla-model-3-reservations-400000/

4 https://www.inverse.com/article/18257-tesla-changes-mission-from-transport-to-energy

5 http://waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html

6 http://finance.yahoo.com/news/elon-musk-just-unveiled-teslas-005718826.html

7 Car manufacturers websites

 

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8 thoughts on “TESLA – an ambassador of sustainable future.

  1. Good insights on using renewable clean energy to power electric cars. Tesla is indeed a leader in this field and is pushing the frontiers on how to harness clean energy sources and eliminating the use of fossil fuels. I agree that Tesla will force other energy industry leaders to change the beat on climate change and improve the global impact of novel technologies.

    1. Thanks, Robbie!

  2. While Tesla’s progress has been impressive in the US, I question Tesla’s viability in other countries where there is a lack of infrastructure of supercharging stations within a full charge’s driving radius. Without sufficient availability of infrastructure in most countries, Tesla’s impact would be confined to the US. Would Tesla’s impact on improving environmental sustainability be more pronounced if they expand into more applications but just focusing on the US or would it be more significant if they were to focus on Tesla cars and expand geographically?

  3. Thanks for the article, Stan! I am certainly cheering Tesla on from the sidelines.

    The most critical factor determining the success of Tesla’s climate goals is ensuring that the electricity used to charge these cars comes from renewable sources. This is because the emissions of an EV are theoretically worse than a conventional vehicle (w internal combustion engine) IF the electricity is largely coal-derived. Therefore, simply replacing all cars on the roads with EVs is not enough to reduce the carbon intensity of transportation – the power industry needs to get its act together as well.

    1. Thanks Alex! Totally agree on your point – that’s why Tesla is trying to integrate further in supply chain!

  4. Stan!

    Thank you for the article!
    I think this lays out a great example of how an innovative company can reshape the market and the way of how we live.
    It was interesting to see the history of their business as well as how they are creating more value by integrating with existing technology to
    strengthen their position in a market they have created.
    Do you think Tesla has other potential companies that they can partner up with our acquire to expand their business reach beyond EVs and home energy system in the short term ?
    Thank you again !!!

  5. I can’t think on a more inspirational company to discuss sustainability than Tesla. Elon Musk has been disrupting our long conceived dogmas about energy in different ways. The strategy to start with very innovative energy concept, great performance and cut-the-edge design made the brand aspiration and created a market that could otherwise not be interested on sustainable cars only for the environment aspect of it. It broadened the market and I really appreciate the objective way you described how Tesla resolved the concerns / failures of previous attempts to tackle the market.
    The power wall and solar roof is indeed great advancement on the path to have an integrated environmental solution to the energy problem.

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