Tesla: Leading The Charge Toward A More Sustainable Future
Tesla is removing the stigma from sustainable living by offering products people want.
Human activity has led to dangerous climate change that threatens to destroy our planet in the not-so-distant future [1].
The good news is that we can help: individual activity makes a difference in reducing global warming [2]. Unfortunately, most of our options – reduced meat consumption, recycling, using less electricity [3] – require behavioral changes that are difficult to sustain in the long term. How many times have you tried to develop new habits such as reading more books or exercising more? Permanently changing our behaviors is no small task. To make the changes necessary to save the world, we need things that we want to buy or do, not things we should buy or do.
Personal transportation is a major contributor to the greenhouse gases released into our atmosphere [4]. Cars that reduce fuel consumption have been on the market for a long time, but at the expense of horsepower and aesthetics. We should buy these cars, but do we want to?
Tesla, an electric vehicle and energy storage company, is here to take advantage of this opportunity. Tesla’s mission is to “accelerate the world’s transition to sustainable energy.” It has a better chance at actually achieving this goal than the hybrids and fuel efficient vehicles that came before it because Tesla isn’t boring; Tesla is making sustainable products that people want, almost irrespective of their sustainability.
The demand for electric vehicles is likely on the rise. Many governments offer financial incentives to consumers to encourage the purchase of electric vehicles. Furthermore, as the number of offerings of desirable electric vehicles increases (car type, price, and make), the demand for electric vehicles should increase. But putting all of these electric vehicles on the road doesn’t solve the problem, because they are only as green as the energy used from your local grid to charge their batteries [9].
There’s a solution: solar panels!
Solar panels use energy from the sun to create a flow of electricity. SolarCity, a provider of residential solar panels, installs solar panels on your roof at no cost. You buy the electricity generated by the solar panels from SolarCity, like you would from your utility company, only it’s miraculously cheaper. This benefits the environment and saves you money! And yet, the vast majority of homes don’t have solar panels. Why is this? Unfortunately, most people probably think they’re ugly.
(Re)Enter Tesla. Tesla has partnered with SolarCity to make a revolutionary product, Solar Roof, which was unveiled last week on October 28th. Each tile of the Solar Roof looks like a traditional roof tile, but has a solar cell hidden within it. As Elon Musk explained: “The goal is to have solar roofs that look better than normal roofs, generate electricity, last longer, have better insulation, and actually have an installed cost that is less than a normal roof plus the cost of electricity. So why would you buy anything else? [10]” Finally, solar panels you want on your house.
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1. National Geographic, “Climate Change 101 with Bill Nye | National Geographic,” YouTube, published December 2, 2015, https://www.youtube.com/watch?v=EtW2rrLHs08, accessed November 2016.
2. Ibid.
3. Natural Resources Defense Council, “How You Can Stop Global Warming,” https://www.nrdc.org/stories/how-you-can-stop-global-warming, accessed November 2016.
4. U.S. Energy Information Administration, “How much carbon dioxide is produced by burning gasoline and diesel fuel?,” http://www.eia.gov/tools/faqs/faq.cfm?id=307&t=10, accessed November 2016.
5. Tesla, “Tesla Press Information,” https://www.tesla.com/presskit/autopilot, accessed November 2016
6. Tesla, “Tesla Timeline,” https://forums.tesla.com/forum/forums/tesla-timeline-0, accessed November 2016
7. Motor Trend, “2015 Dodge Charger SRT Hellcat vs. 2015 Tesla Model S P85D! – Head 2 Head Ep. 65,” YouTube, published April 29, 2015, https://www.youtube.com/watch?v=RWQ-dnpplaA, accessed November 2016.
8. Ibid.
9. Wired, “Tesla’s Electric Cars Aren’t as Green as You Might Think,” https://www.wired.com/2016/03/teslas-electric-cars-might-not-green-think/, accessed November 2016.
10. Tesla Motors, “Powerwall 2 & Solar Roof Launch,” Vimeo, published October 28, 2016, https://vimeo.com/189402941, accessed November 2016.
11. Tesla, “Solar Roof,” https://www.tesla.com/solar, accessed November 2016
The featured image at the top of the post is from: https://i.ytimg.com/vi/RWQ-dnpplaA/maxresdefault.jpg
Great article Raphi! The only thing I am wondering about is the entire resources consumed for manufacturing the car. If we truly want to understand the environmental impact we need to analyse all emissions related to production, use and disposal of the product. In particular with electric vehicles I am concerned about the amount of resources (lithium) required for building the batteries and their recyclability.
Thanks Rafi – great piece.
I admire Elon Musk’s mission-driven nature. When he released some Tesla IP for broad consumption, Stephen Colbert asked him why he has done it, the implication being that it is foolish to do so, from a competitive perspective. Without missing a beat, Musk replied that we are all in a giant boat taking in water, and that if Tesla has a great design for a bucket, it makes sense to share that bucket design with everyone else so that we do a better job of bailing water.
This is all great, but whether or not the people who put up the equity capital for Tesla’s endeavour will be appropriately recompensed is an open question, in my view.
Very interesting article, Rafi- I like the distinction that you pointed out between the things we want to do and the things we should do. Tesla’s innovation is a great step to change out behavior and encourage us to be more socially responsible. Tesla’s innovation also promotes competition from other companies, which encourages constant innovation and a constant drive to become more efficient. I am very interested to see the consumer response to Solar Roof; one possible issue with the Solar Roof is that it is likely easier to install on newly constructed houses. I do not know whether Solar City can install the new roof on an existing house, which leaves a lot of the market and a lot of the energy savings off the table.
Interesting read Rafi! Many thanks. Solar City has done wonders to increase the accessibility and adoption of roof-top solar across the States. It will be interesting to see how the innovative Solar Roof product is priced. The solar city website mentions that the cost of the product will be less than an equivalent roof adjusted for lifettime utility savings, driving an early estimate by Consumer Reports that an average sized residential roof could cost up to $70-$100k, vs. c. $15-45k for a conventional clay or slate roof [1]. The average household income of solar homes is about 35% higher than the national average, and conventional roof-top solar is becoming more affordible, but this will likely be a luxury product [2]. If so, I fear the Solar Roof will serve a limited target market, while potentially disincentivizing home owners from installing unfasionable conventional panels.
1 – http://www.consumerreports.org/roofing/heres-how-much-teslas-new-solar-roof-shingles-could-cost/
2 – https://www.solarpulse.com/blog/solar-not-just-for-weathy-people/
Great post Raphael. I, like Miras, have always been positive about Elon Musk’s mission driven ambitions. While I think that Elon Musk has created a products that is desired by the basic consumer, I tend to think that the company is set up for success even in a world where people are living in a more sustainable manner. As you duly noted, the Tesla products are cool and with the Tesla 3 soon to be released (2017), Tesla will now be available to the average American consumer (current price of around $35,000). This is a company that continues to innovate, improve its product range and aesthetics, and drive down the price of their vehicles and driving broadly. I think they are set up for success in any environment but is that success already built into the stock price? Valuation does seem relatively rich.
Very interesting piece Rafi! I must say, Tesla has really transformed the image of EVs into something that actually looks cool, and people want regardless of their sustainability. However, I personally still think there are some major issues that need to be addressed before becoming the major powertrain of the future, like range anxiety, time it takes to charge (20 mins to charge half by Tesla’s supercharger), and affect it has on the auto industry. The first two issues could be resolved with a dramatic improvement in battery technology, which seems unlikely as industry professionals say there is limited upside to dramatic improvement. The effect on the auto industry, I think, is a serious issue. An EV uses a fraction of the number of parts that go into a gasoline engine or fuel cell vehicle. What this means is that if EVs were to really diffuse, it would wipe out a large portion of auto parts manufacturers, which could damage some major economies (including Japan). Countries will take this into consideration when making a decision on which next generation powertrain hey want to support, and this could become a major roadblock for the wide-spread of EVs. That is why, I believe EVs will eventually secure only a niche portion of the market, and Fuel Cell Vehicles, that don’t have the disadvantages of EVs will become the next major drivetrain for the future.
Great article, Raphi! I initially was skeptical of Tesla’s position as a company that wants to have a large scale impact on making people more energy efficient. There Tesla models have a very high price point, and are notorious for having a wait list due to its high demand. I now recognize that Tesla is building demand for more electric cars by having a strong design and performance (many people argue that Prius was lacking in performance). In addition to solar panels (Solar City project), Tesla is also designing energy efficient batteries that can be used within a home.