As a follow-up to my post on Elon Musk and Lyndon Rive’s talk at the Public Utilities Commission on Thursday, a few more comments stood out to me that may be worth relating:
- Tesla came within a few days of going bankrupt in Christmas 2008. The company secured a round of funds at the last minute. This drama was captured in the movie “Revenge of the Electric Car,” which is worth watching if you haven’t seen it. (It also captures Musk’s dysfunctional private life, which seemed like too much info for my tastes).
- Musk was convinced that Tesla and SpaceX (his rocket company) would fail. He did think SolarCity would succeed, but only because he had confidence in his cousin Lyndon. So much for the myth of the starry-eyed entrepreneur who bends reality to fit the vision.
- Musk launched Tesla not because he loved cars necessarily but because he identified the lack of sustainable energy as the critical challenge facing humankind. Energy storage and alternative-fueled cars are critical to addressing the problem. How many successful entrepreneurs start their companies not out of love of the product but because they believe it will address a critical environmental and societal need? My guess is Musk is unique — or at least unique in the sense that he’s been successful so far.
- Musk feels that burning oil for energy is a waste of a good product. He thinks oil has a higher value in the long term for plastics. He likened oil consumption for transportation to burning the furniture in your house for firewood.
- Along these lines, Musk wryly noted that one of the raw materials for batteries includes a byproduct of coal. But just a bit, he said.
- Musk foresees used Tesla batteries, once they’re no longer useful for driving but still have 60% capacity, being deployed for stationary energy storage. Either that or they’ll be completely recycled. Either way, he sees no waste resulting from the batteries.
- Tesla is experimenting with battery swapping, which takes 90 seconds to do (quicker than refilling a tank with gas). They will begin soon on the LA to San Francisco route to see if it’s popular. Personally, I don’t see how the ownership model works for this process. If you give up your Tesla car battery somewhere along Interstate 5, and you’ve paid tens of thousands of dollars for that battery as part of the car purchase, how do you know your new battery is just as good? It only seems like it could work if you lease your battery, but that business model did not work for Better Place.
Musk is under a lot of scrutiny these days given the high-flying success of Tesla (the stock is up over 600% in the last twelve months), so his comments can make an impact on the electric vehicle market just through the media attention they receive. But it’s worth giving his words and experience thought, given how he’s revolutionized the electric vehicle market — and soon the energy storage one — so far.
Today I heard a panel presentation at the California Public Utilities Commission (PUC) with Elon Musk, CEO of Tesla, and Lyndon Rive, Elon’s cousin and CEO of SolarCity. I deal with a lot of climate-friendly businesses in my line of work, but Elon Musk is the one business leader with products (electric vehicles and batteries) that actually have the capability of saving the world. Electric vehicles mean two things for fighting climate change: 1) they represent a switch from transportation fossil fuels to electricity and 2) they offer an investment in battery technology that could enable 100% clean, renewable electricity (for when the sun isn’t shining and the wind isn’t blowing). Global climate change solved!
So I was keen to hear Mr. Musk’s take on battery research and the future of EVs. Some highlights from the panel discussion, which also included PUC President Micheal Peevey:
- Musk noted that the raw material cost of batteries is about $60-$70 per kilowatt hour, and he believes his new battery “gigafactory” can get the price down to near that level. Right now batteries are about $400 per kilowatt hour, which for a 24 kilowatt Nissan LEAF means the battery alone costs $9,600. Bringing it down to $100/kwh means shaving $7,200 off the cost of the LEAF. Or perhaps more importantly, for the same cost you could get a 96 kilowatt battery in a LEAF, enabling a range of over 300 miles per charge. That’s a game-changer for EV adoption.
- Lyndon Rive complained that solar PV customers who have a battery pack for nighttime or backup energy are currently having to wait up to 8 months for the utility to connect the system. To which Musk commented in disbelief, “that’s crazy.” I guess utilities have no incentive to hasten their inevitable demise, but this needs to change.
- Musk envisions home battery packs to go with rooftop solar that would be maybe three inches thick and attach to a garage wall. Otherwise, he said, “they can’t take up the guest room.”
Overall, Musk and Rive noted that EVs and rooftop solar still represent a tiny fraction for consumers, with rooftop solar outpaced by new home construction nationwide and EVs less than .1% of new car sales right now. We have a long way to go, but it’s good to know we have dedicated business people working to solve these problems and export California technologies and innovation around the world.
Back in 2000, rolling blackouts descended upon California and eventually cost Governor Gray Davis his job. The crisis was caused by deviant corporate behavior, and one of the companies involved, NRG, finally settled with the state in 2012 for damages related to its conduct. But instead of being punished, the California Public Utilities Commission allowed NRG to commit to spending $100 million on electric vehicle public charging infrastructure, essentially helping the company invest in a new business venture.
It was a controversial bargain, but the upshot for the state was a big injection of capital into badly needed electric vehicle infrastructure. With 65,000 electric vehicles now on the road in California, the competition is increasing for charging stations. The NRG settlement would result in at least 200 new publicly available fast-charging stations around the state, as well as wiring for 10,000 more charging stations in offices, homes, and other public and private spaces.
So how is implementation going? Not well. NRG’s new subsidiary to build these stations, eVgo, is way behind schedule, with only 13 fast-charging stations open out of the 200 that need to be ready by 2016, with 100 of those to be open by the end of this year under the settlement terms. The company cites the startup pains associated with trying to get new infrastructure built – finding amenable site hosts, upgrading local utility wiring and equipment, and clearing the necessary permits. They believe they will make up for lost time this year.
But much of the reason for the delay is the basic conflict of interest involved in this settlement, which allows eVgo to site charging stations in crowded, complicated, and suboptimal urban areas in order to maximize the company’s profits. To be truly effective, expensive fast-charging stations (which can repower a battery to 80% capacity in just 20 minutes) should instead be located between cities and popular destinations, replicating the interstate gas stations drivers rely on for longer trips. These sites allow drivers to extend the range of their all-battery vehicles when they’re driving between cities like San Francisco and Sacramento, Los Angeles and San Diego/Palm Springs/Santa Barbara, or Fresno to Bakersfield, to name a few. For a good example of successful (and speedy) fast-charger deployment, look no further than Tesla and its optimally located Supercharger network along well-traveled interstates (enabling even an all-electric cross-country road trip).
On the other hand, fast-charging stations in urban areas tend to be a waste of money and counter-productive. Most city visitors live or work within 20 or 30 miles, meaning that a full charge over a regular wall outlet at the home or office should be sufficient to get them into the city and back in a typical 85 mile-range electric vehicle. And if they do need to charge downtown, these drivers usually don’t need a 20 minute fast charge because they are there to work or shop for at least one or two hours anyway. For this time frame, a cheaper “Level 2” 240V station will do just fine. What’s worse, crowded downtown fast chargers often require drivers to wait in line, defeating the purpose of a “fast” charge.
So why doesn’t eVgo/NRG follow this more sensible interstate model instead of trying to site their stations in suboptimal urban areas? Part of the answer lies in the settlement, which prescribes regions of the state for deployment. But the larger problem is that the company has a business interest in trying to make money off these stations through repeat customer membership deals and from patronage at nearby retail options. That’s why the company is working with upscale businesses, like Whole Foods and Urban Outfitters, and selling membership deals to hook local drivers into subscribing and becoming captive customers who will shop near the stations. This is a waste of charging infrastructure and a probable money-loser for NRG to boot.
If California was serious about making NRG pay for its rolling blackout damages and truly benefitting electric vehicle drivers, state leaders would insist that the fast-charging stations go in interstate locations, a la Tesla, to facilitate extended range for all-battery electric vehicle drivers. These locations should be the first priority, and they should blanket the state between our cities, not within them, and certainly not next to the local Whole Foods.
Were NRG representatives to take that approach, they’d find it a lot simpler to get these stations installed and ready. Sure, it wouldn’t help the company’s bottom line as much, but it would best serve the electric vehicle drivers of California.
