Tesla Motors may be more than an electric vehicle automaker, according to financial services corporation Morgan Stanley.
Morgan Stanley says that Tesla could actually end up disrupting centralized power companies as we know them, but how? Tesla is not just a car company, and neither is SolarCity just a solar panel company. In the end, they are an entirely new way to look at renewable energy and transportation. SolarCity, of course, is a solar power company, whose solar panels help to defray the costs of powering homes and businesses, as well as reduce their associated carbon footprints.
Of course, SolarCity, by itself, can’t fully eliminate one’s dependence on the power grid, the energy generated at some faraway place and delivered via overhead and underground power lines. The problem is that the sun isn’t consistent in power output, at least from our perspective where we’re trying to generate renewable energy from it. Renewable energy intermittency is one of the biggest obstacles to a fully renewable power grid, which is where Tesla comes in.
Tesla, you see, is not a car company, but an energy storage company. True, they put big lithium-ion batteries in the Tesla Model S, but they also make lithium-ion backup batteries for homes and businesses. Tesla backup batteries are the perfect combination for SolarCity solar panels, enabling some homes to completely disconnect from the grid, which has power companies worried. Morgan Stanley says this could be the beginning of a spiral effect, in which fewer grid customers will drive up power prices for grid-tied customers. Rising grid-power prices will drive even more customers to decentralized renewable options, such as SolarCity and Tesla backup batteries, which will, in turn, drive grid-power prices up even more.
Construction of the Tesla Gigafactory, which will produce some 80 GWh of lithium-ion battery capacity every year, only 50 GWh of which is planned for electric vehicles. The rest of that capacity is for renewable energy backup power, and could eliminate the conventional power producer’s business model forever.
Photo credit: Kevin Krejci