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Tesla is a Battery Company

blog.jeremyrwelch.com

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Re: Tesla is a Battery Company

#61

Post by cloudwalking »

darkmighty wrote: post #42
happertiger wrote: post #11

If Tesla executes, they are going to be the leading company in a number of industries, of which battery technology and manufacturing is one of them. They are also leaders in direct sales, JIT manufacturing, motor design, any one of which is a disruptive innovation channel they could monetize, all in the service of building electric cars. Tesla is an energy company, a battery company, a car company, etc, just as GE or…

I have a little trouble seeing all the businesses you see, which unsubstantiates your point a bit for me. For example, being a leader in direct sales is great for their goal of spreadings EVs. But how is this applicable anywhere else outside the car industry? Does apple 'monetize' direct sales as a 'channel'? Does apple 'monetize' JIT manufacturing as a 'channel'? To me they just use it as a tool to better position t…

I agree with what you are saying. I'd just like to be pedantic about 300+ HP induction motors: they are deceivingly complex to manufacture. The tolerances required are measured in microns. Fortunately, the motors are inexpensive (relative to ICE engines), easy to swap out of the car, and cheap to teardown and rebuild. Manufacturing, design for manufacturing, and efficient service and rework departments will be important for scaling motor production.

Re: Tesla is a Battery Company

#62

Post by happertiger »

jeremyrwelch wrote: post #25
happertiger wrote: post #11

If Tesla executes, they are going to be the leading company in a number of industries, of which battery technology and manufacturing is one of them. They are also leaders in direct sales, JIT manufacturing, motor design, any one of which is a disruptive innovation channel they could monetize, all in the service of building electric cars. Tesla is an energy company, a battery company, a car company, etc, just as GE or…

My point with this post is that their business hinges on Battery production and tech more than any other component, and thus the lead they've created in this space matters more than any of their other innovations. But you're right, their execution on multiple fronts is truly unreal.

I mean it's a hell of a good point. Not trying to take away from the post.

Re: Tesla is a Battery Company

#63

Post by chatmasta »

Also consider:

- solar city benefits from increased storage capabilities of batteries. Solar panels (a capital investment) generate higher returns when they also power buildings at night.

- National electric grids benefit from increased battery storage because they can store electricity for hours after it's actually generated.

- tesla is building a network of superchargers all connected to the electric grid

- tesla has arguably more at stake than any company in battery R&D. Few if any companies are as motivated as tesla for battery tech to improve.

My hypothesis is that Elon Musk is architecting Tesla as the "cloud" of electricity generation, storage, and transfer. He is building the ultimate smart grid. Electric cars are a nice excuse to develop the requisite network effects and initial momentum before expanding to other verticals. He's going from a red ocean to a blue ocean. [1]

http://en.m.wikipedia.org/wiki/Blue_Ocean_Strategy

Re: Tesla is a Battery Company

#64

Post by fivedogit »

Wrong. Tesla is a distribution company. Cars and batteries are commodities, more or less. Corporations are now extremely efficient at copying and commoditizing their competitors' innovations - just look at how fast the android ecosystem popped up alongside iPhone - so technological advancements are not the real source of long term value but merely the temporary advantage needed to be first to a market and set up network effects.

EBay, for instance, was there at the right time to take recent technology advancements, set up a network-effect marketplace and milk it for, oh, 2 decades. They stopped being a technology company a long time ago.

So how does this relate to Tesla? Answer: The supercharging stations. If Tesla owns the most charging stations then EV buyers have a good reason to buy Tesla over a hypothetical Ford or Toyota EV, putting Tesla at a major advantage. Eventually it'll be on Ford and Toyota to bet the farm on a massive supercharger network of their own and launch an EV to compete against Tesla's entrenched domination of the marketplace. Right now, Tesla is in a fleeting moment of technological and branding advantage which they are correctly leveraging to quickly set up their charging network.

It's a lot like telcos bragging about their coverage networks. Eventually all the (surviving) car companies will be doing something similar, running TV ads about their charging station maps.

Companies are either A) marketing companies or B) distribution companies or a blend of both.

Nike is a marketing company that happens to sell shoes. Ditto Taco Bell and cheap Mexican food.

Amazon, Akamai, Google and Facebook are distribution companies --- they own the network or marketplace.

Disney (mostly distribution), American Airlines (mostly distributiom) Walmart (mostly distribution) and Apple (mostly marketing/branding, but appstore and itunes are distribution powerhouses) are a little of both.

Edit: Nielsen, Google are distribution comapnies. They have prohibitively large or complicated information ingestion systems set up to and then resell the results.

Newspapers and TV are too, but their distribution monopolies are crumbling.

Interesting. That means solar advancements are very bad for Tesla. If people don't need to stop and charge, then the distribution network is worthless.

Re: Tesla is a Battery Company

#65

Post by higherpurpose »

happertiger wrote: post #11

If Tesla executes, they are going to be the leading company in a number of industries, of which battery technology and manufacturing is one of them. They are also leaders in direct sales, JIT manufacturing, motor design, any one of which is a disruptive innovation channel they could monetize, all in the service of building electric cars. Tesla is an energy company, a battery company, a car company, etc, just as GE or…

Don't forget the "car charging" business. Tesla announced before that it's willing to license its Supercharger network to other car makers. That business could one day replace most petrol charging stations.

Re: Tesla is a Battery Company

#66

Post by tim333 »

faitswulff wrote: post #59
DenisM wrote: post #18

Musk has previously said in an interview that Li-Ion batteries were at $600 / kwh, but when he looked at the component and manufacturing costs they were at $100 / kwh. Somehow the entire supply chain has piked up a lot of overhead, and he realized it would be possible to reduce that. At those prices, Model-S battery pack costs are between $36k and $51k! When I realized that, I came to conclusion that Tesla Motors cou…

I'm sorry, but what is a Gigafactory?

http://en.wikipedia.org/wiki/Gigafactory

Re: Tesla is a Battery Company

#68

Post by apendleton »

I'm sort of curious how the economics of this will end up working out from a consumer's perspective. Lithium ion's big advantage was energy density -- you can store a lot of juice for not much mass or volume, which is a really big deal for portable electronics or cars... for a stationary home installation, though, much less so. Having a giant thing sitting in your backyard might be okay if it was high-capacity and cheap, and it seems like there might be other contenders besides Li-ion that might do well given the different set of operating constraints that stationary storage would have. Maybe other battery chemistries, or maybe kinetic energy storage devices like evacuated flywheels, compressed air, etc....
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