Two disclaimers before we start:
1) This is a highly politicised issue, but this post has no political agenda. I’m not political because nothing could ever possibly be more annoying than American politics. I think both parties have good points, both also have a bunch of dumb people saying dumb things, and I want nothing to do with it. So I approached this post—like I try to with every post—from a standpoint of rationality and what I think makes sense.
2) Spoiler: The post is very pro-Tesla. Which might seem suspicious since A) Elon Musk asked me to write about this and B) I just wrote a post calling him the raddest possible man. But two things to keep in mind:
First, this isn’t commissioned by Musk, and I’m being paid $0.00 for doing it. He suggested I take the issue on because I think he thinks there’s a lack of full tree trunks in people’s heads about it — but he never suggested that I say good things about Tesla, electric cars, or anything else.
Second, the currency WaitButWhy lives on is integrity. Without it, WBW loses its ability to make an impact. And integrity came first here, even at the expense of Musk potentially hating me at the end of it, if that’s what was necessary. If I didn’t think this would have made a great WBW topic, I wouldn’t have taken it on, and I’m pro-Tesla in the post because after a ton of learning and thinking — including as many counterarguments to Tesla and its world view as I could find — that’s how I feel.
And with that, let’s dive in.
[EDITOR’S NOTE: The following is an excerpt of a much longer post at WaitButWhy in which Urban backgrounds his Story of Tesla with two incredibly detailed chapters, The Story of Energy and The Story of Cars. If you’re keen to get on with The Story of Tesla, it appears below, but we strongly recommend you bookmark the extra chapters linked above for further reading later.]
The Story of Tesla
Christie Nicholson remembers meeting Elon Musk for the first time at a party back in 1989.
“I believe the second sentence out of his mouth was ‘I think a lot about electric cars,’” Christie said. “And then he turned to me and said, ‘Do you think about electric cars?’”
Electric cars seems like an odd thing to spend your time thinking about in 1989. To understand why Musk felt so strongly about them, let’s start by understanding what electric cars are and how they work.
There are a handful of common modern types of cars considered greener than traditional gas cars — namely hybrid cars, plug-in hybrid cars, and electric cars (which we’ll call EVs for “electric vehicles”). There’s also a lot of talk about another type — hydrogen fuel cell cars, which we’ll just call hydrogen cars. The one thing these cars all have in common is an electric motor.
There are two types of electric motors — the AC induction motor and the brushless DC electric motor. Since 98% of people reading this aren’t licking their lips to read a three-paragraph description of the difference, let it suffice to say that they’re the same basic idea:
An electric motor is a pig in a blanket where electricity is sent into the outer bread part (called the stator), which is always stationary, and that electric current causes the hot dog part (called the rotor) to rotate. The rotor is attached to the wheel axle which turns the wheels. Like this:
How an AC Induction Motor Works
One of the two common types of electric motor is the AC induction motor (that’s what Tesla cars use). AC stands for alternating current, and induction means there’s no physical contact between the rotor and the stator—electricity in the stator generates a rotating magnetic field which enters the rotor through electrical induction and causes it to spin.
(Alternating current is the type of current that comes out of your home outlets and it generates power by electrons moving back and forth in a quick vibration in the wire. This is opposed to DC, or direct current, which is the more intuitive type, used with batteries, where electrons flow through a wire in a single direction. Since electric cars use batteries, the battery produces direct current, which then has to be converted into alternating current through a box in the car called an inverter.)
The stator generates a rotating magnetic field by sending electricity through it in a three phase system:
So there are three different wires each with an alternating back-and-forth pull — just look at any one color and you’ll see it’s just going back and forth. But the three wires’ currents are staggered in just the right way that the point of “pull” in the stator rotates in a smooth circle. When the rotor is added in, this rotating magnetic field causes it to spin:
The idea is that the rotor can never quite catch up to where it wants to be — it’s always “chasing” the rotor’s field, and that chase is what powers the car. The AC induction motor was invented by Nikola Tesla, and that’s why Tesla Motors is named after him.
(Faraday, who discovered induction, was their second choice.)
Here are the types of cars that use an electric motor:
Hybrids (also called HEVs for hybrid electric vehicles), like the Toyota Prius, have both an electric motor and an internal combustion engine. You don’t plug a hybrid car in — the gas charges the battery. The battery also gets charge from an electric motor trick called regenerative braking. Normally, all the joules of kinetic energy a car is harnessing when it’s moving are lost when the car brakes and they’re just converted into heat. With regenerative braking, electric cars send some of that kinetic energy back into the battery, holding onto those joules to be used again later. The electric component of a hybrid replaces some of the need to burn gas, increasing the miles per gallon, decreasing the car’s emissions, and saving the driver gas money). Hybrids are a big step up in technology from normal gas cars.
But they still kind of suck. Why? Because they’re only kind of helping the emissions problem, not solving it, and they still need to burn gas to work. As I’ve heard people say, a world 100% full of Prius drivers is still a world 100% addicted to oil.
Plug-in hybrids (also called PHEVs) are a better option. Plug-in hybrid cars, like the Chevy Volt, the Honda Accord Plug-In Hybrid, and the Ford Fusion, allow you to charge the battery at home and typically drive 10-40 miles just on battery power before the gas kicks in. That’s often enough to get most people through most of their day, meaning they may rarely need to use gas.
But if we’re gonna get so close, why not just go all the way?
Hydrogen cars are entirely electric — but they don’t use a battery. Instead, they fill up with fuel at a station just like a gas car — except they fill up with compressed hydrogen, not gas. The hydrogen mixes with oxygen in the air to produce electricity, which it sends to the motor to power the car. They produce no tailpipe emissions because the only byproduct is clean water. Sounds great, right?
Musk, for the life of him, cannot understand how anyone could make an argument in favor of hydrogen cars.
(I queued up this video to where you can hear Musk call hydrogen cars “bullshit” and then go on a little rant about them.)
But it’s confusing because lots of car companies, like Toyota, Honda, and General Motors, are currently pouring big investments into making hydrogen cars. I wanted to understand the disagreement, so I read like 12 articles in favor and opposed to the technology. At the end of it, I’m having a hard time seeing why hydrogen cars would have a more promising future than electric vehicles. Among many reasons hydrogen cars seem inferior to EVs, here are four:
1) Hydrogen cars seem beholden to natural gas, a fossil fuel, in order to extract the hydrogen fuel, while electric cars get cleaner over time as electricity production gets cleaner.
2) When it comes to energy density, driving range, and cost, the best case scenario for hydrogen cells is similar to where EV batteries are now, and EV batteries will get better with time.
3) Hydrogen is a somewhat dangerous and difficult-to-handle substance that’s a nightmare compared to the simple wall-outlet electricity EVs use.
4) Down the road, when the norm is to charge the car up in your garage, it’s going to seem primitive to have to go to a station to fuel up.
In an email exchange I had with Musk about hydrogen cars, he explained it like this:
If you take electricity coming from a solar panel and charge a battery, you can get ~90% efficiency. Simple and cheap. Instead, if you use that electricity to split water, separate the hydrogen with extreme purity, pressurize it to crazy levels (or, even worse, liquefy), transfer it to a giant (even in liquid form) hydrogen storage tank in the car and then recombine it with oxygen to generate electricity, you would be lucky to get ~20% efficiency. Expensive, complex, bulky and super inefficient. It loses on every dimension, including refuel time when pack swap is factored in.
Cost is bad for fuel cells, but that is only one of many bad dimensions. If fuel cells were in any way better than lithium batteries, they would at least be used in satellites, some of which cost over $500 million. They are not.
Finally, if I wasn’t already convinced, this highly-detailed, fairly devastating takedown of the argument hydrogen cars left me feeling eternally puzzled about why the Japanese companies would want to go further down that road.
Finally, there are electric cars, or EVs, like the Nissan Leaf, the BMW i3, the Ford Focus Electric, and the Tesla Model S. These are simple — there’s a big battery, which you charge, and it powers the electric motor. No liquid involved.
Now, in theory, EVs make a lot of sense. Forgetting the rest of the car for a second, let’s look at some of the advantages of the electric motor over the internal combustion gas engine:
Electric motors are more convenient than gas engines most of the time. Gas cars have to go to the gas station; EV owners plug their car in every night the same way they charge their phone — no stopping for gas. A gas engine is a lot more complicated than an electric motor, with over 200 parts; an electric motor has fewer than 10. A gas engine requires a transmission, a tailpipe, gears, and a bunch of other grease-covered shit; an EV has none of those things — when you open the hood, it’s more storage space, like the trunk. Gas engines need oil, which means they need oil changes; EVs don’t. The extra complexity means gas cars end up needing a lot more maintenance than EVs.
It costs a lot less to power an electric motor than a gas engine. The extra costs gas car owners incur for oil changes and car repairs aside, the gas engine’s fuel — gas — is much more expensive than the electric motor’s fuel—electricity. Let’s look at the math:
The average electric car gets about 3 miles per kilowatt hour (kWh) of electricity, and the US national average electricity rate is 12 cents per kWh. That means that driving a mile in an electric car costs about 4 cents.
The cost of driving a gas car is harder, because gas prices and car fuel efficiency widely vary. The best case scenario for a gas car is unusually cheap gas (let’s say $1.40/gallon) coupled with unusually high fuel efficiency (let’s say it’s a rare gas car that gets 35 mpg). That would produce the same 4 cents/mile that electric cars get. But very few gas car owners ever pay 4 cents/mile. Without being crazy extreme, for the worse case scenario, let’s say a high $4.00/gallon gas and a below-average 15 mpg — in that case, a mile in a gas car costs 27 cents per mile. At a pretty typical 12,000 miles/year, that means at absolute best, gas is tied with electric for cost, and at worst, it costs over $3,000/year more to drive on gas.
The gas engine is one of the two major causes of the energy/climate crisis. We’ve already discussed this — transportation burning oil makes up a third of the world emissions, pollutes cities, and makes nations over-dependent on other nations. The electric motor emits nothing. Yes, it may run on electricity that was produced in a dirty way — but we’ll get to that later.
So that’s why Musk told Christie Nicholson that he thinks a lot about electric cars. The electric motor is clearly the easier, cheaper, and more sensible long-term plan for powering cars.
But when the electric motor made its first appearance over 100 years ago, there were serious drawbacks that prevented it from becoming the norm — and since electric cars went out of production back then, little time or money has been spent trying to fix those issues. There tend to be three age-old concerns about the viability of the electric car:
EV Concern 1) Range. This is really three issues rolled into one:
A) Will the battery life be too short for long drives, limiting an EV to a car only for local driving?
B) If I’m out and about and need to recharge my battery on the road, is there anywhere to do it? Or will I end up stranded?
C) If I do find a charging station while on the road, will I have to sit there for five hours while it charges?
These issues are such a prevalent concern among potential EV-owners that they have their own term: range anxiety.
EV Concern 2) Performance. The most common electric vehicle you’ll see around today is the golf cart. Which doesn’t excite car owners very much. No one wants a car that drives like s..t, and when people think about zooming acceleration, they tend to think about powerful gas engines, not electric motors.
EV Concern 3) Price. Ever since the beginning, EVs have cost more than gas cars, mainly because of the high cost of the battery.
Back in 1910, people cited these exact same three concerns over electric cars, and they’re part of the reason gas cars won the day. Gas cars had had their own major problems, but Ford had figured out how to make them viable — something no one has yet done for the electric car.
I asked Musk about his opinion on Henry Ford. He said, “Ford was the kind of guy that when something was in the way, he found a way around it, he just got it done. He was really focused on what the customer needed, even when the customer didn’t know what they needed.”
When he decided in 2003 to stop thinking about electric cars and start making them, the odds weren’t in Musk’s favor. There were the high barriers to entry that had prevented any startup car company from succeeding in almost a century; there was the unaccounted-for cost of carbon emissions, which made starting an EV company like trying to stand out on a basketball court as a rookie when all the players except you can foul with no penalty; there was the gargantuan oil industry, which would do everything in its power to stomp on any effort to make it obsolete; and on top of that, the EV was a new kind of car whose development had essentially been on pause ever since EV makers threw in the towel a century earlier, and a daunting and costly catch-up process would lay ahead — the three concerns listed above would all need to somehow be addressed for this to have a chance.
The overarching question was, had electric cars never had their day because of irreconcilable issues? Or had the right person — the Henry Ford of EVs — just not come along yet?
Car companies aren’t supposed to start in Silicon Valley, and Silicon Valley startups aren’t supposed to make cars.
But the electric car industry is not your grandfather’s car industry. And in 2003, it wasn’t anyone’s car industry. After the brief bubble of new electric cars in California in the 1990s between the year the state passed the Zero Emissions Vehicle mandate and the year they were bullied into repealing it, the electric car industry had withered into the oblivion of the scattered California garages and tech labs of car geeks. But big things have emerged out of small groups of cutting-edge California geek labs. Apple. Microsoft. Google. So why not the modern electric car industry?
One of these little car technology companies was AC Propulsion, and while carmakers in Detroit, Tokyo, and Munich continued to not realize that electric cars were clearly the future, the guys at AC Propulsion were experimenting away, quietly making one giant EV breakthrough after another.
One day last week, I cold called AC Propulsion and accosted their CTO, Paul Carosa, who had been there since the beginning. He was too polite to figure out how to get off the phone with me, so he told me about those years in the late 90s and early 2000s when they created their fanciest car to date — the tzero (pronounced t-zero). AC Propulsion had figured out two huge things:
First, the tzero was fast — it went 0 to 60 mph in 4.9 seconds, which was crazy fast for an electric car and put it on par with the fast gas cars.
Second, they had made big progress on an enormous EV shortcoming by getting innovative with the battery. Previous EVs had used lead-acid batteries, which were heavy and limited. AC Propulsion realized that the laptop and mobile phone industry had been pouring development into making small 18650 lithium-ion batteries increasingly efficient, and that those batteries had gotten really advanced.
18650 batteries look like AA batteries, which seems like an odd match for a car, but by lining up a few thousand of them in a big battery case, they had just created by far the world’s best ever car battery. EVs had always been limited to a 60 or 80 or maybe a 120-mile range. The tzero could go 250 miles on a single charge.
In 2003, a California engineer named JB Straubel was then tinkering around with EVs himself, met Musk to ask for funding for a car project he was working on. Soon after that, Straubel brought Musk by the AC Propulsion office to see the tzero. Musk was blown away. Musk had suspected for a while that EVs were the way of the future, and now that he saw the possibilities with his own eyes, he was convinced.
At the time, he was already running SpaceX and trying to colonize Mars, so launching a startup car company wasn’t something he could really fit into his calendar. He really wanted the world to see the tzero because he was sure it would excite people and help to stoke a new wave of EV interest — and he tried to convince the AC Propulsion guys to bring the tzero to market, with his funding, but they didn’t want to deal with that because it sounded icky.
Instead, AC Propulsion introduced Musk to a group of three other entrepreneurs who had also recently approached them with a similar idea and had also been rebuffed. Those three guys, who included Martin Eberhard and Marc Tarpenning, had come up with the idea of licensing AC Propulsion’s technology and bringing it to market themselves as a new company called Tesla Motors. (At the time, they didn’t own the rights to the name yet — some guy in Sacramento did.) But to make any of this real, they needed money.
It was a perfect match, so they decided to make a run at it together. Musk, who could only dedicate part time to the project, could fund the effort, become Chairman and maintain a strong influence, but by making Eberhard CEO, he could focus on SpaceX with the bulk of his time. And Tesla was on its way.
The group formed a team and started figuring out how to be a car company. One big problem they had was that this was a new technology, and the R&D costs early on for a new technology drive up the price of the product — that’s the same reason the very first cell phones and computers started out really expensive. Except in those cases, they were the first of their kind, so the product could be super expensive and still sell. Because perfectly good, affordable gas cars already exist, it wouldn’t work to come out with the equivalent quality of a $25,000 gas car for $100,000+. So this became the business plan:
Step 1: High-priced, low-volume car for the super rich. Come out with the expensive first product, but make the car so fancy that it’s worth that price — i.e. just make it a legit Ferrari competitor and then it’s okay to charge over $100,000 for it.
Step 2: Mid-priced, mid-volume car for the pretty rich. Use the profits from Step 1 to develop the Step 2 car. It would still be expensive, but more like a $75,000 Mercedes or BMW competitor instead of Ferrari.
Step 3: Low-priced, high-volume car for the masses. Use the profits from Step 2 to develop a $35,000-ish car that, after the government’s $7,500 EV tax credit and the savings on gas, would be affordable to the middle class.
It’s kind of a Hershey’s Kiss business plan:
The overarching mission wasn’t to build the biggest car company in the world. It was to solve a bunch of long-standing EV shortcomings and build such an insanely great car that it could change everyone’s perception of what an EV could be and force the world’s big car companies to have to develop their own line of great EVs. Their end goal, and the company’s official mission, was “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.”
In other words, EVs are gonna happen, but we’re gonna make them happen a lot sooner. Sooner, in this case, is important, because it means carbon emissions decrease earlier and the long term effects of them are much less damaging.
So they got working. And four years later, they had their Step 1 car, the Roadster:
With the Roadster, Tesla wasn’t trying to make their long term car (one Tesla employee told me that from the beginning, Musk would make sure everyone knew that the company’s long-term mission “was not to make toys for rich people.”) They just wanted to build something awesome to A) show the world how great an EV could be, and B) generate revenue to develop their Step 2 car. So they didn’t start from scratch on the body design, instead basing it on a Lotus Elise.
The Roadster didn’t change the world — no $110,000 car ever could — but it sent a message to the industry that Tesla was for real. You may not have heard of the Roadster when it was announced in 2006 or when it started shipping in 2008, but some of the major car companies took notice — Nissan soon launched the all-electric Leaf and GM launched the plug-in electric Chevy Volt soon after the Roadster’s appearance.
(Bob Lutz, who was Chairman of GM at the time, openly credits Tesla for their decision to make the Volt, saying that after the Roadster unveiling, he went to the GM board and asked, “If a little company in California can do this, why can’t we?”)
But there were some pretty big problems with the first product. Finishing the car was taking way longer than planned, the cost of making each Roadster was way higher than planned, and the early shipments often had defects. This made Musk sad, so he and the board fired Eberhard as CEO, which made Eberhard sad.
(They were both so sad about this that they still aren’t on speaking terms today.)
Just as this was going down, the most inconvenient thing ever happened — the 2008 recession — which made the entire car industry sad, but especially Tesla, who didn’t yet have brand recognition and wasn’t yet profitable because of all the upfront investment they had been pouring in. A crippling recession is never helpful, but it was really, really bad timing for Tesla.
Musk had hired a second CEO, but a year in, in late 2008, the company was in one of those movie scenes where the person’s been badly wounded and clearly about to die and there’s this dramatic dialogue scene and the dying person is saying some last words and every time they pause for a second the audience is like, “Is that it? Are they dead? Oh no they just talked again I guess there’s one more line.” Musk, who wasn’t enjoying the drama of the scene, finally was like, “PAUSE THE MOVIE QUICKLY PAUSE IT PAUSE IT” and took over as CEO, going into full adrenaline mode to try to keep the company alive.
(Musk’s thoughts on the role of CEO: “The CEO receives the distillation of all the worst problems in company, only spending time on the things that are going wrong, and you get all the stuff other people can’t take care of, so you have a filter for the crappiest problems in the company.”)
And as mentioned in the last post, SpaceX was in the same movie at the same time playing the same role, so Musk’s life was like this:
But enough people had been impressed enough by Tesla that a couple key investments at critical moments came in and kept the company alive, and at the end of the whole mess, Tesla was now a new company. Musk was CEO, and the Jonathan Ive of the car industry, star car designer Franz von Holzhausen, who had been the Design Director at GM and then Mazda, had decided to bet his career on the barely-standing Tesla and became their chief designer.
A few weeks ago, when I stepped into the Tesla design studio to meet von Holzhausen, I was excited to meet the uber-flamboyant diva celebrity car designer, just hoping I would understand what he was saying through his unbelievably thick German accent — and was horribly disappointed to meet an extremely normal-acting American man.
The studio, which I described in the last post, is a shiny playroom of art and physics. Von Holzhausen showed me a full-size clay car that was simultaneously testing two different possible designs for the upcoming Model 3 by making the two halves of the model different. He explained how precise everything about car design is and how “a difference of a quarter millimeter can spread itself across the entire car.”
I asked him what it was like to come to Tesla after having spent years at more established car companies. He described the difference like this: “A company like GM is a finance-driven company who always has to live up to financial expectations. Here we look at it the other way around—the product is successful when it’s great, and the company becomes great because of that.” (This mirrored what Musk had told me earlier in the day: “The moment the person leading a company thinks numbers have value in themselves, the company’s done. The moment the CFO becomes CEO—it’s done. Game over.”)
Von Holzhausen went on, saying, “Another difference is that at other companies, engineering comes first — a design package is prescribed on the designer and they’re told to make it beautiful. At Tesla, design and engineering are assigned equal value, and Elon keeps them opposed to each other.”
Now that von Holzhausen has gotten used to his freedom to be obsessed with the product at Tesla, he says he “would dread to go back to pre-historic ways.”
Von Holzhausen’s first mission at Tesla was to design their Step 2 car — the mid-priced, mid-volume one — that would be called the Model S. The Roadster was based on existing design and was a springboard for the company more than a long-term product. The Model S would be Tesla’s first flagship product, and it was their chance to reinvent the concept of a car, from scratch. Von Holzhausen said, “When we started Model S, it was a clean sheet of paper.”
This all sounded uncannily similar to how Steve Jobs had done things at Apple. He obsessed over making “insanely great products,” and he never paid attention to what other companies were doing, always coming at things from a clean sheet of paper perspective. When Apple decided to make a phone, they didn’t try to make a better Blackberry — they asked, “What should a mobile phone be?”
Over time, big industries tend to get flabby and uncreative and risk-averse — and if the right outsider company has the means and creativity to come at the industry with a fresh perspective and rethink the whole thing, there’s often a huge opportunity there.
When the iPhone came out, it turned the phone industry on its head. So should we be surprised that when the Tesla Model S came out, Consumer Reports anointed it the best car that had ever been made with an unheard of 99/100 rating, and that Tesla owners are across-the-board obsessed with the car? No, because it’s like the iPhone — it’s a 15-year leap into the future.
The Model S is the fastest 4-door sedan in history, with 3.2-second 0-60 mph time. It saves battery power by being insanely aerodynamic with the industry’s lowest drag coefficient (.24). A bunch of engineering innovations have combined to give it the highest NHTSA safety rating of any car ever tested by the US government, 5.4 stars.
The Model S is already driving itself and soon, it’ll be able to drive itself to meet you out in the driveway in the morning with the temperature already set and the right music on; at night, you’ll be able to pull up to the house and just get out of the car and the car will park itself into the garage and plug itself in. They did away with model years (i.e. the 2014 Toyota Camry, the 2015 Toyota Camry, etc.), so instead of holding all the year’s new features until the new release, they just put features in as they go. Someone who buys a Tesla today might have a slightly different car than someone who bought one two weeks ago. And they’re constantly rolling out fixes and new features through automatic wifi software updates — owners often wake up in the morning to discover the car has a new capability.
In a bunch of cases, Tesla has wanted to do something that wasn’t technically possible with the current world or industry limitations — so they’d build what they needed to build to change those limitations:
The Tesla battery is heavy and they wanted to make the body super light to offset some of that weight — so they turned to SpaceX and used its advanced rocket technology to make Tesla the only North American car with an all aluminum body.
Musk and von Holzhausen’s (I’m sick of writing von Holzhausen with the little v and the upsetting spelling and I wish he had a different name) team had spent all this time perfecting the design of the car before it was time to put the door handles on, and they got really used to it that way. When it was time for handles, they didn’t want to ruin how it was, so they figured out how to make the handles lay flush with the door.
They didn’t like the dealership model and wanted to sell directly to customers, but many states don’t allow that, so one by one, they’re fighting the states that won’t and slowly overturning direct car sales bans.
They wanted to get rid of buttons altogether and have all controls on a huge, 17″ touchscreen — but when their first car came out, there was no iPad yet, and 17″ touchscreens suitable for a car didn’t exist. So they built their own.
Innovations like these helped make the Tesla a standout car, but there were still questions around the major shortcomings of EV cars. Of the three EV concerns we listed earlier, AC Propulsion had made significant headway on two — performance and battery range — and the Tesla team had picked it up from there and had continued to improve both. Performance was now the best in the world for a sedan and the battery range — between 208 and 270 miles per charge, depending on the model — was excellent.
But there were still two problematic questions that needed to be addressed:
Can you take a road trip? And can anyone afford the car? Tesla is working on both.
How Tesla is solving the road trip problem:
With a 200+ range, the Tesla battery has plenty of juice to get most people through the day on any normal day. Even a busy day of commuting and errands and exploration rarely gets close to 200 miles driving. But on long city-to-city drives or road trips, EVs have always had an issue. So Musk came up with a solution:
Build a worldwide energy network. Tesla came up with the Supercharger — a high-caliber, on-the-road charger — and there would be public stations that would contain a whole row of Superchargers, just like a row of gas pumps at a gas station. A normal garage charger takes either 5 or 10 hours to fully charge the Model S battery, depending on which type of in-car charging system you opted for. Clearly no one wants to stop for multiple hours while on the road to accomplish what a gas car can by stopping for five minutes — so the Supercharger goes much faster.
It can charge a Model S at a rate that gives it about 60 miles of range for every 10 minutes of charging time. So if you’re driving between Boston and New York (215 miles), you might make it with no stopping, but if you did need to stop, you could just charge up for 5 or 10 minutes — not that much more than a stop for gas. Driving from LA to San Francisco (382 miles), you’d need to stop for 20 or 30 minutes.
And the thing is — on a 4-hour drive from Boston to New York, isn’t a 5-10 minute stop desirable anyway? On a 6-7 hour drive from LA to SF, wouldn’t most people stop for 20-30 minutes to get some food and go to the bathroom anyway?
The more I thought about this, the more I realized how little of an issue range is for an EV with a good battery like the Tesla. Just say you do a long drive five days a year. That means on 360 of the 365 days, you have to do nothing. You just drive, and you never need to stop at a gas station. And the other five days? You’d probably just need to stop for about as long as you would stop on a long drive anyway.
Seems like a perfect solution, but you need to have a Supercharger along your drive if it’s going to work. Here’s where Superchargers are today in the US:
And they’re building them at a furious pace — here’s where they’ll be by the end of 2016:
For now, only Teslas can use the Supercharger stations, and only the Tesla can really make long-distance drives right now anyway. But down the road, Musk plans to partner with other EV car companies so any EV can stop at one.
A couple other things about Superchargers: they’re all free to use, and soon, they’ll all be entirely solar-powered. Musk jokes that if there’s a zombie apocalypse, Tesla owners will be fine because they won’t need the grid to fuel their car. And it means that if you had friends to stay with, you could technically drive across the US without taking a wallet.
This is also going to become even easier with time, because Tesla is making new innovations every year. For example, the Roadster now has a 350 mile range battery and you can just about do LA to SF without stopping — it’s only a matter of time before their cheaper cars have a similar range. Tesla also recently unveiled a new Supercharger feature — the battery swap. A Tesla driver will be able to pull up to a little rectangle and stop the car. The ground opens up and a machine comes out and takes the car’s battery off, brings up a fresh battery and puts it on, and you’re good to go — all in 90 seconds. This would cost $60-80, or as much as an expensive tank of gas — so Tesla drivers would now have the option of “fast or free.”
So with that problem very close to being out of the way, Tesla seems to only have one issue left:
Who the hell can afford a $75,000 car?
The starting price of a Tesla Model S is technically $69,900. But if you want the higher-range cars and the faster charging battery, the price jumps up. There are a bunch of other “well s..t now that you mention it yeah I do want that too” features, and a Model S can quickly work its way toward the $100,000 mark.
Musk is always quick to point out that for the moment, the US offers a $7,500 tax credit for buying an EV of sufficient range. He also points out what I mentioned above about the $2,000-ish a year gas savings. Sure — but even subtracting all that, we’re around $55,000 for a Tesla Model S, which is prohibitive for most people. Tesla has a new car coming out soon — their SUV with Falcon Wing doors, called the Model X — but it’s another Step 2, mid-price / mid-volume expensive car. Doesn’t solve the pricing problem.
It’s a rule of thumb in the car world that every $5,000 decrease in car price approximately doubles the number of buyers who can afford the car. So if Tesla can somehow come out with a stellar EV for about $35,000 less than the Model S, it would double the buyer pool 7 times, or multiply it by 125-fold. Which would now mean most people could afford it.
Let’s bring back Tesla’s Hershey’s Kiss business plan from earlier:
So Step 3 is what this is all about. Step 3 is why Tesla exists and if Tesla ends up changing the world, it’ll be because of Step 3.
That car is the Model 3, and it’s coming out in 2017. Supposedly. And it’ll cost $35,000—$27,500 after the tax credit, and after taking gas savings into account, under $20,000. Supposedly.
But how? Right now, the Model 3 battery costs around $20,000. Even if Tesla ditches the high-tech aluminum body, makes the car smaller, and ditches some of the fanciest things about the Model S, the battery pack alone makes a price like $35,000 impossible.
How Tesla is solving the high-price problem:
Big problems call for big solutions. To solve the range problem, Tesla is building a worldwide energy network of Superchargers. And to solve the price problem, they’re building this:
That’s what Musk has named the Gigafactory. It’s a $5 billion lithium-ion battery factory, currently being built in Nevada. The factory will be self-sufficient, powered entirely by on-site solar, wind, and geothermal energy, and it will employ 6,500 people.
Right now, the world’s combined annual output of lithium-ion batteries is 30GWh—mostly for use in laptops and mobile phones. The Gigafactory will make more than that each year, which means it will more than double the total lithium-ion batteries made each year globally. There are two huge benefits to doing this:
First, Tesla is planning to ramp up production of their cars until they’re producing 500,000 of them a year, and they’re going to need a lot of lithium-ion batteries when they do. Musk’s reasoning is simple: “I know we can’t get enough lithium-ion batteries unless we build this bloody factory, and I know no one else is building this thing.” The numbers make this necessity clear. To make enough batteries for their planned 500,000 cars a year, Tesla will need about 30GWh of lithium-ion batteries a year — the current world output — meaning that without building the Gigafactory, they’d have to use every single lithium-ion battery in the world. Tesla’s Gigafactory will just barely cover Tesla’s needs — if a day comes when every car company is making a ton of EVs, there will need to be many Gigafactories built by many companies.
Second, by both doubling the world supply of lithium-ion batteries and by continuing to innovate with battery technology, Tesla’s work at the Gigafactory will make batteries a lot cheaper. Musk says the price of the battery should go down by at least 30%. Right now, Musk says Tesla could make their cars with a 500 mile range — they don’t do it because it would increase the cost of the car. But as battery prices go down, EV ranges will go up as well.
I’m pretty convinced that the Model S is the best expensive car ever made. In its first year, its sales blew away its well-known direct competitors — the S-Class Mercedes, BMW 7-Series, the Lexus LS, and the Audi A8 — and it’s been in the lead ever since. But those cars all play in a small space for the very rich.
It’s the Model 3 that will turn the industry on its head. You may not know much about Tesla today — or particularly care — but I’m pretty sure everyone will know about the Model 3 soon. Maybe that’s why Musk refuses to do any advertising — because he knows that when the Model 3 comes out, he won’t have to.
The market has taken notice. Tesla’s $226 million IPO in June of 2010 marks the first IPO for an American car company since Ford went public in 1956. Since then, the company’s value has soared upwards. Today, seven years after being on the brink of bankruptcy, Tesla’s market cap is a massive $31 billion. To put in perspective how big a deal that is, I set Tesla’s path to that number down on a graph with the Big Three US automakers:
The car industry forest canopy has been pretty stagnant for a long time, and for decades, no hungry underdog has been able to make a run at it. Tesla hasn’t cracked the canopy yet, but for the first time in a long time, there’s a new company bolting upwards from the ground at lightning speed.
A Ripple Effect
If you’re another one of the big car companies, and you’ve been around for decades, and you’re comfortably doing your thing, making slight incremental improvements each year to your existing line of cars — could anything in the world be more annoying than Tesla?
Remember, the car companies know alllll about electric cars and their benefits. Most of them made an electric car in the 1990s when California mandated that they do, and then the second the mandate went away, they confiscated and literally crushed the cars. Then they whipped the cars into the dump and covered the pile with a tablecloth with a “nothing to see here folks” look on their faces. The scare was over and they could go back to their comfort zone, incrementally improving their gas vehicles.
Their feelings on EVs make perfect sense:
Dealerships make a huge amount of profit fixing gas engines, oil filters, and doing oil changes — money they’d stop making when they sold EVs with motors that rarely broke.
The car companies already know gas cars back and forth, and they’ve mastered the art of making a few tiny new changes to them each year so the new year’s models will be a little better than the previous year’s. But EVs are a new world for them, and they don’t know any more about how to make a good powertrain or improve battery energy density than Tesla does — in fact, they know less, as evidenced by Toyota and Mercedes both buying the Tesla powertrain for their EVs. What a pain in the ass all that R&D would be.
Most importantly, the world already wants to buy gas cars. There’s no convincing needed — just a few standard TV ads to hone the latest phase of the brand’s image and inform customers about the latest product updates. But EVs are new and scary to customers, and there’s a hump to get over in educating the world about why they should buy one. But the really problematic thing about this is that in order to market an EV well, you need to do what I’m doing in this post and explain all the reasons EVs are obviously a huge step forward from gas cars — which simultaneously sends the message, “Gas cars are dirty, inconvenient, and old-fashioned.” Not a thing you want to do when your current bread and butter is selling 10 million gas cars a year.
And who wants to deal with all of these things when they could just skip it if Tesla would just go away.
Franz von Holzhausen has worked at three of these other companies. The way he sees it, “they’re trapped in their manufacturing legacy process, trapped in gas engines being their bread and butter, trapped in their dealership model, trapped in their own history.”
Musk explains it as a lack of guts and originality: “The big car companies are so derivative. They want to see it work somewhere else before they will approve the project and move forward.”
But the Tesla tree is racing upwards, and its impending burst through the canopy has successfully scared the industry. We know this for sure, because when the first Tesla Roadster shipped in 2008, there were no big company EVs on the market. Today, Ford, Chevy, Nissan, BMW, Mercedes, Volkswagen, Fiat, Kia, Mistubishi, and Smart all have an EV on the road. Not a coincidence.
So what’s the deal with all of these other EVs?
Most notable is the Nissan Leaf, introduced in 2010, has been the highest-selling EV in the world in recent years (though the much more expensive Tesla Model S has topped the industry in EVs sold so far in 2015). The Leaf costs about $30,000 ($22,500 after tax credit) and has a range of 84 miles. Nissan CEO Carlos Ghosn has for a while been one of the few strongly pro-EV voices in the car industry outside of Tesla. He talks about the “cul-de-sac” effect that will begin to accelerate EV sales — i.e. people will be jealous that their neighbor has a more futuristic car and doesn’t have to get gas, will ask questions, and then might get one themselves.
The recently introduced BMW i3 is currently selling next best after the Leaf and Model S. It costs $43,000 ($35,500 after tax credit) and has a range of 81 miles. BMW CEO Norbert Reithofer has jumped on the EV train, saying, “You have to look into the future, 10, 15, 20 years…cars like the BMW i3 are a must.”
No other EV has had significant sales yet.
(In the almost-an-EV world of plug-in hybrids, the Chevy Volt – $35,000, 38 mile range before gas kicks in – and the Toyota Prius Plug-In – $31,000, 11 mi range before gas – are the clear leaders.)
I asked Musk about the Leaf and the i3. About the Leaf, he said, “The range is too low, but if they keep iterating on that, they’ll eventually get there.” On the i3: “They’re trying to do something there. The range is low, but it’s a step in the right direction, and if they keep going, they’ll get something there.”
This “Congrats on your first big boy toilet poop, Johnny, now next time try to get the whole thing inside the bowl and you’ll be on your way!” tone is about as effusive as Musk gets when assessing the industry’s current attempts at an EV.
Volkswagen just hired BMW’s ex-CEO and also seems to be bullish on EVs, and GM is promising big things with their upcoming EV, the Chevy Bolt.
Other car companies still aren’t convinced. Mercedes CEO Dieter Zetsche said he doesn’t expect EVs to sell well for a while, because “the customer gets a car with less range, longer refueling times, somewhat less space, and a higher price tag.” The major Japanese companies, Toyota and Honda, are both skeptical about EVs and have been pouring their future into hybrids and hydrogen cars instead. Fiat Chrysler CEO Sergio Marchionne is so anti-EV that he’s told the world not to buy their Fiat 500e EV, saying they’re only selling it because regulations have forced them to.
If EVs are the dominant car of the future, they have a long way to go to get there. As of January 2015, there were a total of 740,000 EVs on the road worldwide. Compare that to the whole picture of over 80 million cars sold worldwide annually and over a billion total cars on the road. EVs make up only a fraction of a percent of the car industry. But they’re on the move:
So we’re either at the cusp of a new EV-dominated car era or in the middle of another little EV bubble before they vanish from existence again — and as you can see from the quotes above, the car industry is currently divided in which way they’re betting.
I think we’ll learn a lot more soon, because the world is still yet to see its first true potential EV disruptor. The issue with Tesla right now is most people can’t afford one, and the issue with every other EV is the range sucks. It looks like this:
The truth is, the typical American drives 37 miles a day on average, and the 80+ mile range options are probably actually plenty for most people. But 80 miles seems like an insufficient range to prospective buyers, and mass adoption won’t happen with that kind of range.
Tesla’s plan all along was to plant a stellar car right in that Quadrant 4 box, and that’s what they say they’re going to do in 2017 when the Model 3 comes out. A number of other carmakers, including Nissan, Volkswagen, and GM have all declared their intention to release a not-that-expensive long-range EV soon. It’s not clear if any or all of these companies will get into Quadrant 4, but if they do…
If there are high-quality, affordable EVs for sale that also have a high range…
I cannot think of one reason anyone would ever buy a gas car again.
A Tesla-quality car that’s affordable to the middle class would seem to have only pros in the Pro/Con list:
Pros of an affordable, high-quality, long-range EV over a comparable gas car:
- Drives better. The instant torque of an EV is like exploding out of a gun. There’s no lag time between your foot touching the pedal and the car moving. Without gears, it accelerates perfectly smoothly. The handling is incredible.
- It’s silent.
- More convenient. No stops for gas. Much less need to take the car in for maintenance. No oil changes. More storage because with no engine, the hood is now the frunk (the front trunk).
- Safer. With no engine, the entire front of the car becomes a crumple zone. That’s part of why the Model S has blown away the safety ratings.
- Cheaper. No gas, oil, and less maintenance. No longer beholden to fluctuating gas prices.
- Healthier. No smog in cities, which cause many, many health problems.
- Oh yeah, and the whole thing about avoiding an environmental, economic, or geopolitical catastrophe.
Cons of an affordable, high-quality, long-range EV over a comparable gas car:
- People who love to shift the manual stick around with all their muscle because they’re a cool cat on the open road to destiny can’t do that.
- Five days a year, when you’re on a long drive, you have to stop for 30 minutes every three hours instead of five minutes every four hours—a con that becomes moot if you would have stopped for 30 minutes anyway every few hours.
EVs aren’t there yet. Right now, there are legit cons. But as the next few years pass, EVs will get cheaper, battery ranges will get longer and longer, Superchargers will pop up more and more until they’re everywhere, and charging times will just decrease as technology advances. Maybe I’m missing something, and I’m sure a bunch of seething commenters will try to make that very clear to me, but it seems like a given to me: the gas era is over and EVs are the obvious, obvious future.
An Angry Giant
The car companies, as I mentioned, aren’t happy about all of this — they’re acting like a kid with a cupcake whose parents are forcing them to eat their vegetables.
But how about the oil industry?
Unlike car companies, the oil industry can’t suck it up, get on the EV train, and after an unpleasant hump, continue to thrive. If EVs catch on in a serious way and end up being the ubiquitous type of car, oil companies are ruined. 45% of all the world’s extracted oil is used for transportation, but in the developed world, it’s much higher — in the US, 71% of extracted oil is used for transportation, and most of that is for cars.
So if the car industry has a cupcake and its parents are forcing it to eat vegetables, the oil industry has a cupcake but its parents are forcing it to eat razor blades. The car industry will resist the veggies and have a little tantrum before grudgingly giving in — the oil industry will furiously try to gouge the parents’ eyes out in resistance because for him, this is life and death.
And that’s how the oil industry sees EVs — horrifying razor blades. And giant industries don’t just roll over and eat razor blades without a serious fight.
We’ve seen this before. Tobacco companies fought tooth and nail to stay alive and strong as long as possible when the tide started to turn against them. And the oil industry itself has been fighting tooth and nail for a while now on another front — the battle to keep people confused about whether global warming is a thing.
Usually in these cases, the industry clawing for survival knows it’s on the way out. But in the meantime, they’re making money, and the longer it takes before the public fully gets the situation, the longer it’ll be before the public uniformly rejects them, politicians are able to regulate against them, and the money finally stops. Time is very much money in these situations.
The tactic to stay alive longer is always the same — put out misinformation to create confusion, and make it political so half the country feels like they’re going against “their own team” if they side against the industry.
The super-clever way they create confusion is by generating the public perception that there’s a genuine debate among scientists. That’s how you make a 97% consensus seem like an open question:
The same tactic was used a few decades ago when 98% of scientists said smoking caused lung cancer, but the tobacco industry convinced the public for a long time that “scientists disagree” about whether smoking is harmful. The book Merchants of Doubt details how many of the same pro-smoking “scientists” a generation later became the “global warming isn’t a thing” scientists — the actual same people.
When the 1990 California Zero Emissions Mandate forced car companies to make an EV in order to continue selling cars in CA, the oil industry saw it as a small tumor they needed to swiftly nip in the bud before it grew into a serious threat. Soon, a new voice popped up, a grassroots campaign called “Californians Against Utility Company Abuse” (CAUCA). The campaign staged protests against the state’s proposed utility investments in alternative-vehicle support systems. They also mentioned that “the environmental benefits of electric cars were dubious” But as it turns out, CAUCA was created by a PR firm who was hired and funded by the oil industry. Eventually, the mandate was repealed, EVs disappeared, and the tumor was squashed.
Now, there’s a new tumor for the oil industry — Elon Musk. Tesla is showing the public directly that EVs are the future and funding the development of technology that’s making EVs better than anyone thought possible. A government mandate is crushable — obsessed Model S owners are not.
But again, oil doesn’t need to avoid an EV future to have a reason to fight — it just needs to delay the EV future for as long as it possibly can. Tesla’s mission is “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.”
Big oil’s current mission is “to delay the advent of sustainable transport by making people think EVs aren’t actually better for the environment than gas cars.”
EVs are most definitely better for the environment — so the oil industry reaches for a key tool.
There are now a bunch of myths floating around. I didn’t treat them like automatic myths — each time I heard an argument for why EVs are dirty, I dug in and read about it, but each time, there was little basis in fact. Some examples of myths I’ve seen floating around about EVs or Tesla in particular:
Myth: EV battery disposal is hazardous.
Actually: A) Lithium-ion cells used in cars aren’t especially hazardous and are classified as landfill safe, B) They’re almost all recycled anyway, and C) They’ll continue to be recycled, because a used car battery still has a lot of value, either as a stationary battery or in the raw materials themselves.
Myth: Manufacturing a Tesla is much dirtier than manufacturing a Prius or many other gas cars.
Actually: Expensive cars are dirtier to manufacture than cheap ones. Comparing the manufacturing of a Tesla to a Prius is like saying “Prius’s are dirty because it’s dirtier to manufacture a Prius than a golf cart.” If you compare apples to apples, it’s no dirtier to make a Tesla than a similarly-priced luxury car.
Myth: EVs are a huge burden on the electric grid.
Actually: The grid is sized for the worst second of the worst day of the worst year—so there’s usually a lot of excess capacity. You could replace 70% of US gas car miles with EV miles with no changes to the grid. That percentage will also grow even higher as more homes get their power from solar panels.
Myth: The Tesla uses a lot of graphite in their battery, which contributes to China’s pollution problem.
Actually: The logic here is: “Tesla batteries use graphite; the world’s biggest source of graphite is in China; China has terrible pollution; therefore, Tesla is partially responsible for China’s pollution.” Except when I did some digging, I learned that Tesla uses synthetic graphite made mostly in Japan and Poland, and that the average Model S uses 100kg of it. That 100kg lasts for ten years, so the amount of graphite used to make a Model S is similar to the amount you’d use if you had a few barbecues a year.
But there’s one myth which has been more effective and more pervasive than any of these — the long tailpipe theory.
The long tailpipe theory is everywhere. Anyone who doesn’t like EVs points it out immediately. So what’s the theory? I’ll let Fox News’ Greg Gutfeld do the honors:
“The entire reason for doing these stupid little cars is a lie because electricity comes from coal. In some cases, some studies show that these can produce more pollution than internal combustion engines.”17
Upon first examination, this makes sense. Let’s bring back our US emissions chart to see what Greg means:
Earlier in the post, we identified the two biggest causes of CO2 emissions: cars running on gas and coal making electricity. The long tailpipe theory’s logic is that all an EV does is shift energy production from the first bad category to the second bad category. Since coal is the most prominent source of electricity in the world, and coal emits about 1.5 times more carbon per joule of energy produced, EVs are actually worse emissions culprits than gas cars.
The thing you’ll notice, though, is that every time you hear someone all mad about the long tailpipe emissions of EVs, they’re using wording like, “may be” and “often” and, in the case of Greg, “in some cases, some studies show.” That’s because you have to use words like that when you’re saying things that you wish were true but actually aren’t.
Taking the US as an example, here’s why they’re wrong:
1) US electricity production is mixed, not just coal. Coal only makes up 39% of US electricity production. And that number’s going down:
Natural gas, which emits less than half the CO2 of coal, now makes up over a quarter of US electricity production. Nuclear and renewables emit almost no CO2 and now produce a third of US electricity.
2) Energy production is more efficient in a power plant than it is in a car engine. To use an example with an identical source fuel, burning natural gas in a power plant is about 60% efficient, meaning 40% of the energy of the fuel is lost in the energy production process. In a car, burning gas is less than 25% efficient, with the vast majority of the energy lost to heat. The larger more complex system at a power plant will always be far better at capturing waste heat than a tiny car engine. The increased efficiency means that even a car running purely on coal-generated electricity will emit carbon at the same rate as a gas car that gets 30 miles per gallon — which would be a significantly cleaner-than-average gas car.
Because the breakdown of energy source is different in different states, an EV will be greener in some places than others. The US Department of Energy has a great tool to assess exactly how an EV stacks up against a gas car in any zip code in the country.
In the parts of the country that use very little coal, like upstate New York, an EV’s well-to-wheel emissions are far less than that of a gas car (on the chart, HEV = a traditional hybrid car, PHEV = a plug-in hybrid car):
In the heaviest coal states, like Colorado, EVs cause a lot more CO2 emissions—but still less than a gas car:
The national average is somewhere in between, putting an EV at 61% of a gas car’s emissions overall:
The Union of Concerned Scientists (No one in the world sounds less fun to hang out with than a group of concerned scientists) came up with a way to directly compare car emissions, regardless of the type of car it is — a metric called “miles per gallon equivalent,” or MPGghg (ghg stands for greenhouse gases).
MPGghg is how many miles per gallon a gas car would need to achieve in order to match the carbon emissions of an EV (in the EV’s case, the emissions come from the plant that makes the electricity). In other words, if an EV gets 40 MPGghg, it means it emits the exact same amount of carbon as a gas car that gets 40 MPG.
The average new gas car gets 23 MPG. Anything above 30 MPG is really good for a gas car, and anything below 15 or 17 is bad. For reference, remember that an EV running on just coal would have an MPGghg of 30 (so even in a hypothetical entirely coal-powered state, an EV would be the same as a highly efficient gas car), and an EV running on just natural gas-powered electricity would have an MPGghg of 54 and just top the Toyota Prius, which runs at 50 MPG.
Here’s a useful map that shows the kind of MPGghg EVs get in different parts of the US:
So even for the 17% of the population living in the worst coal states, an EV beats almost all gas cars. This sums it up:
And the thing is, each year, that already-nicely-positioned blue bar will make a little jump to the right. Because the grid is getting cleaner every year, it means an EV gets cleaner as time goes by. Gas cars are locked where they are, and they’ll be stuck watching as the future pulls away from them.
I didn’t feel strongly about this topic before I spent a lot of recent time learning about it — and now that I have, I kind of think the only way someone could feel positive about a gas car future is if they’re misinformed, personally financially interested in gas cars, hopelessly old-fashioned, drunk with politics, or kind of just being a dick? Right? They would have to be one of those five things to be super pro-gas car — right?
The battle going on isn’t about gas cars vs. electric cars. That one’s already decided. This is a war about time. Oil companies will try to slow things down, and they may succeed — but they’re not winning this one.
I just don’t see how they could. A company that makes lantern fuel can stay strong for a while by shielding the public from understanding what a light bulb is, but eventually, people will figure it out and lanterns will be out of business, bringing the lantern fuel company down with it. Greasy hoods are old, noisy acceleration is old, overheating engines are old, oil changes are old, and it won’t be long before everyone realizes that.
A fun field trip in 2050 will be taking your grandkid to see an old 20th-century gas station and explaining how it worked.
(This Nissan commercial does a good job of hammering home the message.)
Driving a gas car is like littering on a camping trail, smoking on an airplane, and throwing a big stack of paper in the trash, and it’s just a matter of time until public disgust catches up to it.
Zooming Back Out
Learning to harness the dragon of fire launched our modern world, and still today, we live in the age of burning. But we need to move on — we need to stop plowing through the trust fund and get a job. The dog needs to let the cave go. We need to learn to make energy the adult wayy — sustainably.
The sustainable energy world of the future — the yellow zone of our timeline from earlier in the post — is simple. It looks like this:
1) Almost everything we use will run on electricity.
2) Almost all of our electricity will be produced from sustainable sources.
That’s a world running on sunlight and electricity, and burning has no part in that world.
This transition will happen in steps, over time. At the beginning of the post, we identified the two problems we needed to address most urgently: 1) Electricity production is huge and mostly dirty. 2) Transportation is huge and almost entirely dirty.
We spent the rest of the post zoomed in on Problem 2 to examine how things got that way, stayed that way, and why we may be witnessing the moment it finally changes.
We won’t get into Problem 1 today — but both Musk, through his US-leading solar panel installation company, SolarCity, and Tesla, with their new product, the Powerwall stationary battery, (You can watch Musk explain everything about the Powerwall here) are leading the way in this half of the energy equation too. For those interested, I put up a mini post on solar power and SolarCity.
People don’t quite realize it yet, but as of this moment, a family or business has the option to individually move themselves into the sustainable future. Using products made by SolarCity and Tesla alone, you can today live in a home and drive a car that are both powered by a solar panel-connected battery and live entirely on sunlight. Musk and his companies have made a little yellow brick road right out of the Fossil Fuel Era for anyone who wants to leave.
And if modern technology can allow individual people, businesses, or even whole cities to live without fossil fuels, it hints that the only era any of us have ever known might be soon coming to an end.
How to Change the World
A study of Tesla isn’t about a car or a car company — it’s about how change happens. And about why it often doesn’t happen.
Our intuition tells us that technology, social norms, movements and ideas just move forward through time, as if forward progress is a river and those things are on a raft gliding through. We so associate the passage of time with progress that we use the term “the future” to refer to a better, more advanced version of our present world.
In reality, if a more advanced future does happen, it’s because that future was willed into our lives by a few brave people. The present isn’t welcoming of an advanced future because the present is run by a thick canopy made up of the ideas, norms, and technologies of the past. There’ll be incremental tweaks and slight iterations on proven-to-work concepts, which may seem to us like moving into the future, but it’s really just a polishing up of the past.
When the real change arrives, you know you’re seeing it. It’s a distinct and exhilarating feeling when you witness a disrupting innovator ram its way through the canopy. I had that feeling when I watched Steve Jobs introduce the iPhone in 2007. Before that moment, I had assumed that the ubiquitous Blackberrys and Nokias and Razors of the world were cutting-edge technology — but that keynote was an epiphany about how buried in the past those phones actually were. You don’t realize your Blackberry sucks until the iPhone exists.
The feeling I had watching that keynote is the same feeling I had when I was six and I saw someone type on a computer word processor for the first time, and the last word on the line would magically jump to the line below when it hit the edge. Typewriters, which had seemed normal that morning, were suddenly ancient. The same thing happened when I saw the first iPod and became instantly disgusted with my horribly clunky and inefficient big booklet of CDs.
I had this feeling again, last month, when I test drove a Tesla Model S. I had driven to the Tesla factory that morning in what had felt like a brand new rental car, and I left the factory in the same car, now feeling like a 1982 model. I get now why Matthew Inman calls his Model S a “magical space car” — because that’s how it felt. That’s how a new, revolutionary technology always feels. Our modern world became as advanced as it is not by floating up an inevitable advancement river, but because of a collection of moments over time when a person or company has done something that makes everyone’s jaws drop.
But those world-changing moments don’t just smoothly glide into the world: these leaps into the future usually have to jam themselves through the canopy and then battle to keep themselves there. The past, which likes to loiter casually in our present world, hates when a piece of the future bursts onto the scene, because that exposes the past for being what it really is — the past. So a new and disruptive technology is often met with hostility as it emerges, as the existing canopy does whatever it can to squash the potential disruptor out of existence before it can gain momentum and start to spread.
The old guard knows that once a disruptor gets a foothold and starts quickly spreading its ideas, the entire game changes — and once that balance tips, now instead of trying to squash the disruptor, everyone has to scramble to try to emulate it.
What Tesla is doing right now is up-close example of how that kind of change happens.
The idea to change the car industry started as brainwaves zipping around Elon Musk’s head, as Christie Nicholson learned the hard way, but Musk couldn’t do much about it on his own. To make the idea real, he had to scale those brainwaves up, and he did that by building Tesla. That brought a new player into the car industry, run by a collective super-brain made up of 11,000 Tesla employees who also happened to think a lot about electric cars.
Change doesn’t happen on a familiar landscape — change has to construct the landscape itself. This is part of the reason the challenges Tesla has taken on are so enormous. Henry Ford didn’t just build a car — he built a landscape, defining what a car was. Since then, car companies have worked within Ford’s landscape. Bringing back what Musk said about Ford — he was the kind of guy that when something was in the way, he found a way around it, he just got it done. He was really focused on what the customer needed, even when the customer didn’t know what they needed.
It’s clear that this is exactly what Musk and Tesla are doing right now. If there aren’t enough charging stations for long-trips, build an energy network. If scalability is held back by the high price of lithium-ion batteries, build a factory that doubles the world supply of them to bring the price down. Just get it done.
But with a goal as ambitious as “accelerating the advent of sustainable transport” and a victory condition as far-reaching as “half of all new cars being electric,” (Musk has a bet going with someone that that will happen by 2027) building one great car company isn’t enough. To bring Musk’s original idea to the next level, Tesla would need to scale itself. To do that, Tesla is building a line of cars so stellar that it’s going to change the public’s expectations of a what a car should be, and the whole industry will have to adjust to that new expectation.
And by solving so many EV problems for its own cars, it’s forging the path to an EV-dominated world for all the other companies too (a company trying to rise to the top of their industry would hold their innovation secrets close — but because Tesla’s goal is to transform the industry, in 2014, Tesla made all of their patents available to whomever wanted them).
Other companies are critical to the mission, because Tesla’s goal is to ramp production up to 500,000 cars, which is only around half a percent of the total cars made each year. He explained, “The impact that Tesla will have is fairly small in and of itself. It will change people’s perception perhaps, but it will not in and of itself change the world. But if large numbers of people are choosing to buy the Model 3, and the car companies see that there’s no excuse left anymore because the car’s long range and the car’s handling and acceleration is better in every way than a gasoline car, and it’s affordable — and people are pretty sure this is what they want to buy — then that’s what will prompt car companies to invest real money into electric vehicle programs of their own, and indirectly, by spurring competition, Tesla can be the catalyst for a multi-order of magnitude shift of the entire industry towards electric.”
That’s how to spread the brainwaves of a single person throughout a huge industry and the global public — and by the time it’s done, everyone will think a lot about electric cars.
Maybe I’m wrong about something, or maybe something unexpected happens — but from what I’ve seen, read, and talked about, it really seems like Tesla is going to fulfill its mission and change the world. It’s going to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible.
If the Model 3 ends up being as great as they say it’s gonna be, there’s no doubt in my mind that electric cars will be the norm far earlier than they would have been. Which will, in turn, mean that 50 years from now, the atmosphere’s CO2 level will probably be lower than it would have otherwise been, cities will be less smoggy than they would have otherwise been, global temperatures will be lower than they would have otherwise been, the sad polar bear will get to eat seals again, along with about 12 other positive effects that will legitimately affect our lives. Pretty down-the-middle definition of changing the world.
Meanwhile, this is what Musk spends two days of his week on. With the rest of his time, he’s trying to make humanity a multi-planetary species — a goal that makes his Tesla mission seem like starting a grapefruit stand. We’ll get into all that in the next post.
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