Archimedes once remarked that if given a lever of sufficient length and a fulcrum against which to place it, he could move the world. Musk’s first Gigafactory, aptly (if unimaginatively) named ‘Gigafactory 1’ is a Nevada-based production facility tasked with nothing less than shifting the world toward clean energy.

Musk's Tesla Is Promising the World Clean Energy One Loss at a Time

Richard van Hooijdonk | Richard van Hooijdonk

If you were imagining paradise, it would look a lot like Ta’u.

A tiny volcanic island in American Samoa, it’s precisely what you’d imagine: verdant mountains, palm-studded beaches, and water so clear you’ be tempted to drink it. The islanders are friendly, welcoming, down-to-earth people who are quick with a smile and proud of their culture. But until recently, this idyll would regularly be broken by the sound of massive diesel generators gulping fuel brought to the island by boat. More than an eyesore or a headache, these thirsty generators were making life difficult, and the people of the island were finding all too often that the candles that lit their childhoods were keeping the dark at bay for their children, too.

The residents of Ta’u are uncommonly resilient. In 1987, Cyclone Tusi savaged the tiny island, doing more than $80 million in damage, destroying the majority of its buildings, and swamping the generators on which Ta’u’s people were dependent. Without electricity, they were forced to rely on coconuts for water, returning to the difficulties that marked their lives before power was brought to the island--only now their habits had been changed by electricity, altering everything from their communication to their diet. For many, being thrown back to candles and coconuts was one step too far.

In the aftermath of the cyclone, more than a few people decided to leave for the capital or the mainland. Musu Fuiava Mutini, a village elder on Ta’u, watched the population dwindle. “Before, there used to be lots of people living here," she told National Geographic. "But in the time of Hurricane Tusi in 1987, everything was destroyed. Most people moved away, to Pago Pago or the U.S.” Intermittent power, then, wasn’t just ruining refrigerated food--it was challenging Ta’u’s way of life and driving young and old away. Those who remained had grit, and like coarse sandpaper, wore down the things that frustrated them in their island  isolation, but they couldn’t ignore the consequences of their dependence on diesel power.

For instance, the irregular shipments of fuel forced Ta’u’s remaining residents to ration food and electricity. For shopkeepers like Keith Ahsoon, this meant running his refrigerators as little as possible. “I recall a time they weren’t able to get the boat out here for two months [...] We rely on that boat for everything, including importing diesel for the generators for all of our electricity. Once diesel gets low, we try to save it by using it only for mornings and afternoons.” That may not sound like much of a problem, but keep in mind that pretty much every aspect of modern life demands power, and unreliable drinking water is something more than inconvenient.

As Ahsoon reminds us, “It’s hard to live not knowing what’s going to happen.”

That all changed last year when Tesla purchased SolarCity, and funded by the American Samoa Economic Development Authority, the Environmental Protection Agency, and the U.S. Department of the Interior, replaced the diesel power system with a clean, solar microgrid. Powered by 5,328 solar panels that generate slightly more than 1.4 megawatts of electricity, this $8 million solar project works in tandem with sixty Tesla Powerpacks. They allow the grid to be fully charged in only seven hours and run without sunlight for up to three days.

The new power is continuous, reliable, and as green as Ta’u’s towering mountains.

And what’s amazing about this project is what it says about the current capabilities of solar. It’s demonstrating that renewable energy can function as an alternative to fossil fuels, not just as a help-mate.

That’s no accident. Musk isn’t interested in projects like this (only) as business ventures; instead, they’re opportunities for him to change minds. And beyond the hype, Elon Musk’s vision is worth a much closer look. He’s inventing the future by investing in renewable energy even where it doesn’t make cents.

 

Tesla: Musk’s ‘dream factory’

For instance, despite its value to Wall Street traders, Musk’s Tesla isn’t remotely profitable. According to Timothy Lee at CNBC, Tesla delivered only 76,000 vehicles last year, recording a loss of at least $675 million. But Lee thinks Tesla is to the auto industry what Apple was to cell phones; as cell-tech transitioned from the Nokia/Motorola era to the contemporary smartphone, the traditional giants were caught napping by the upstarts, the visionaries, and the game-changers. In much the same way, Wallstreet is betting against traditional car companies, who, though too big to fail, are also too big to change.

Instead, they’re backing the innovator and the upstart.

Musk’s Tesla is revolutionary. As a vision of the future of electric cars, it combines three ideas. First, because it’s not an attempt to revamp a legacy platform’s internal combustion engine, Tesla’s engineers could design the car around the battery rather than the other way around, a design challenge that’s humbling the engineers at Ford and GM who are forced to retrofit existing cars with massive batteries for which they weren’t designed. This gives any version of the Tesla a head start: the car can fit a larger battery, easily doubling or tripling the offerings from anyone else.

When you combine this with savvy aerodynamics, the practicality of electric cars becomes clear. Tesla’s Model 3, for instance, sports an incredible 310 mile range--and is fully rechargeable at a Tesla Supercharger in one hour. What’s amazing is that the Model 3 isn’t a trend-setter’s luxury or an expensive oddity. It’s bread-and-butter, middle class frugality. Its cost per mile of range is the lowest in the pack, even at a price tag that quickly rises north of $45,000. And that number will no doubt drop over time as the tech improves and the scale increases. Musk is positioning the Tesla 4 or 5 as the Honda Accord or Volkswagen Golf of the future.

Finally, the batteries themselves are small, lithium ion cylinders not much bigger than those that power your TV remote. They’re easy to source, easy to build, and incredibly cheap to manufacture (by comparison to the alternatives). Heat is a problem, of course; all batteries warm up as they discharge and recharge. But to solve this problem, Tesla has moved to a system of thin, vertical cooling fins made from aluminum, fins that draw heat into a massive refrigerated block beneath the bank of batteries. And though Musk admits that the challenge of organising and cooling these batteries has been a ticklish problem, the results speak for themselves.

This vision isn’t about profitability--it never was. For Musk, Tesla is all about the future. He’s positioning his brainchild as colossus astride tomorrow, the dominant force in a car market that will soon shift entirely from fossil fuels to electricity. Until then, he’ll accept losses to build the car consumers will flock to once gasoline loses its grip. It’s the iPhone all over again, toppling the dominance of Nokia and Motorola and changing what we expect from a mobile forever.

As necessary as vision can be for business, this kind of determined futurism is a risk. To see why he’ll hazard it, it’s important to understand how Musk is developing an entire system for tomorrow, how he’s positioning himself as a titan of clean energy.

Tesla’s solar roof tiles just went on sale in the U.S. this summer, promising to beat the cost of conventional roofing in real-time, not just as an effect of accumulated energy savings. As Wired’s Amelia Heathman writes, “Consumer Reports recently estimated that a Solar Roof for an average size US home would need to cost less than $24.50 per square foot to be ‘cost competitive’ with a regular roof. Tesla claims the cost of Solar Roof is less and the typical homeowner should expect to pay $21.85 per square foot.” For a moment, forget about the ‘infinite’ warranty Tesla’s offering, the cost per square foot, and the business details that consume financial analysts.

That’s not where Musk has his head. Those are just the lures to catch customers, to build a critical mass of people willing to buy-in.

Instead, to understand his vision, you’ll need to sit back and widen your focus. For Musk, it’s never all about the Benjamins.

Tesla’s roof is designed to be paired with the company’s Powerwall, essentially a home-sized version of the industrial strength Powerpack that fuels Ta’u’s microgrid. And every day, the roof will generate at least enough power to refuel a Model 3, power stored in the house’s battery for use in other ways, too.

Can you see the shape of things to come? The outlines of Musk’s vision? For him, the future is entire communities powered by a solar grid feeding a bank of Powerpacks; entire communities with Tesla Solar Roofs energising their Powerwalls; entire communities recharging their Tesla Model 3s in their driveways.

This is a vision of ubiquitous clean energy and global business dominance. It’s not clear which, if either, is his primary goal (and they’re not mutually exclusive, obviously). Musk is clearly committed to a green future and he’s not content to wait until the change happens as the result of the inescapable realities of fossil fuel’s impact on the environment. Instead, he’s positioning himself and his companies as the force driving the shift to clean energy, and nowhere is this more apparent than in his Gigafactories 1 and 2.

Archimedes once remarked that if given a lever of sufficient length and a fulcrum against which to place it, he could move the world. Musk’s first Gigafactory, aptly (if unimaginatively) named ‘Gigafactory 1’ is a Nevada-based production facility tasked with nothing less than shifting the world toward clean energy. Itself powered by solar and wind, Gigafactory 1’s job is to build more ion-lithium batteries, better and cheaper, than anywhere else. In fact, Musk boasts that the first of his battery factories already produces more of them than the rest of the world combined. He added a second Gigafactory (originally called the ‘SolarCity Gigafactory’ and now just ‘Gigafactory 2’) in New York and has plans to start two or three more in Europe next year. With one hundred Gigafactories, Musk claims, he could power the world with clean energy.

That sounds less like a business proposition and more like a vision for change. And whether his long-term goal is to make billions or to shape the future by underwriting the research and development necessary to jump-start tomorrow, Musk’s gamble is positioning him at the very centre of the new world he’s simultaneously dreaming and making possible.

He’s imaging paradise, and it looks a lot like Ta’u.

 

 

Bibliography

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  • Felton, Ryan, “The Tesla Model 3 starts at $35,000 but only with an extreme catch,” Jalopnik, 29 July 2017, accessed 31 July, 2017.
  • Field, Kyle, “Gigafactory will produce more batteries than rest of world combined … by factor of 2!!” cleantechnica.com, 31 July 2017, accessed 31 July 2017.
  • Heathman, Amelia, “You can now buy Elon Musk's Solar Roof panels,” Wired, 11 May 2017, accessed 31 July 2017.
  • Heathman, Amelia, “This island is powered entirely by solar panels and batteries thanks to SolarCity,” Wired, 22 Nov 2016, accessed 31 July 2017.
  • Lee, Timothy, “Tesla keeps losing money. So why is it worth more than Ford?” CNBC, 5 Apr 2017, accessed 31 July 2017.
  • Lin, Daniel, “How a Pacific island changed from diesel to 100% solar power,” National Geographic, 23 Feb 2017, accessed 31 July 2017.
  • Ottoway, Luke, “What makes Tesla’s batteries so great?” torquenews.com, 19 Oct 2014, accessed 31 July 2017.'
  • Pento, Michael, “Tesla is a hot mess—there is no path to profitability,” CNBC, 3 May 2016, accessed 31 July 2017.
 
 

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