Around the world, and despite all the noise in Australia about its big battery at Hornsdale, Tesla is best known for its electric cars, which have become so desirable they have turned the $1 trillion auto industry on its head.
But as founder and CEO Elon Musk said in the company’s recent results briefing, energy – another $1 trillion global industry – actually offers more potential.
“(Energy storage) is going to be a gigantic business,” he told the analysts, who were 95 per cent focused on EVs.
And that puts Tesla in a unique position and with an engagement potential with consumers unmatched by any others – even if some like VW aspire to it.
No other company in the world can offer a suite of products that combines energy generation (roofotp solar), energy storage (batteries), and transport (electric vehicles and charging stations) under a single brand.
What is Tesla going to do with that capability? Will it only seek to dominate the individual market it is playing in, or will it push further into infrastructure and evolve into some a giant utility?
It hasn’t really said. Right now, it is busy enough negotiating the tricky transition, and the enormous capital needs and cash flow challenges, from start-up to major manufacturer; building giga-factories in different continents and learning the fine art of mass production.
On the side, however, the company is also promoting the concept of the Tesla “eco-system,” which may point a way to the future.
And though Tesla prides itself on spending zilch on advertising, it is in the midst of a marketing campaign – “Tesla Destinations” – which invites journalists to experience this “ecosystem” first-hand, and which opens up a competition to all to win a chance to do the same.
RenewEconomy was the first invited and did not need to travel far – just 15 minutes up the road to a “prestige” home in the Byron hinterland, equipped with stunning views, luxurious furnishings and appliances, sunken baths, an 18m pool, a 10kW solar system, two Tesla Powerwall battery storage systems, and the use of a Model X electric vehicle for the weekend.
And, of course, there is an App, which provides information about the power generated, stored and delivered to and from the home, and the state of charge and use of the battery in the car.
That, for a start, is a different way of thinking about energy.
I suspect that incumbent energy utilities, and oil companies, have been able to get away with their outrageous pricing and gaming of the markets – for years, if not decades – because consumers have been kept in the dark. Traditionally, they have seen their bills only once a quarter in the case of a house, with little or no visibility of what was used and when; and maybe once a week in the car (or whenever it is that tank has to be filled or topped up).
With an App, it’s immediate, and it invites the consumer to think differently about what they are using and why, and from where they are sourcing it. Is it from the consumers’ own generation, or the grid? Is it green, black or brown?
And it offers control – one click and you can arbitrage the energy market, switch off appliances, and perform any number of tricks (useful and not-so), with the car.
When you think about it, that presents an existential threat to the incumbent utilities and transport fuel companies. This is a major leap for the promised democratisation of energy.
For a start, it invites consumers to think about energy efficiency – something the incumbents have fought so hard against. It also invites them to think more seriously and creatively about demand management, another essential tool for a renewables-based grid, and another bête-noire of the incumbents.
Truth is, the fuel companies know that their current business models are doomed, at least in the land-transport market. That’s because they know the transition to EVs, and maybe to fuel cell vehicles for larger modes of transport, is inevitable.
For the utilities, the door is not quite shut, or even half closed, thanks to the fact that they preside over an essential service with little discretion on the part of the consumer and with near total regulatory capture.
Still, none of them can see what the model of the future looks like – Australian-style retailers in particular. The business case for the biggest part of their operations – burning coal and gas – is declining rapidly. The rest of it is about packaging bills to consumers. There’s a lot of people who can do that.
Still, that may be a few years away, and there is no doubt that experiencing the joys of a prestige property like Amileka, and the delights of the $250,000 Model X, reinforce the impression that this is – for the moment – something only accessible to the well off.
That, however, would misjudge the trends. The cost of solar (which Tesla sells in the US, but not yet in Australia) is plunging and readily affordable for nearly all – even more so, given state and federal incentives.
Battery storage costs are coming down quickly, too, even if the retail price is not. But new incentives will encourage more products and local manufacturing, and these too will fall quickly. And so will the cost of EVs – some say cost parity within five years – in Europe, it has already arrived, albeit courtesy of some tax incentives.
So, what does a Tesla ecosystem look like?
In the case of Amileka, the undeniably glorious holiday rental that was our base for three days, the 10kW solar installation and the two 13.5kWh Powerwall batteries are pretty much sufficient to do the job.
Amileka is not small – it is a five-bedroom home, with a media room, two kitchens, three bathrooms and an 18-metre pool. But the solar and storage system means it still can account for 90 per cent of its own needs without drawing from the grid.
It also provides back-up in the case of a grid outage, and there is a thing called “Storm Watch”, which means the system will prioritise storage to ensure enough back-up if a major weather event is approaching.
The curve ball in this case is thrown by the Model X, a mighty big machine with 100kWh of battery and – because it is big and heavy, and we couldn’t get over the delights of its acceleration, and my partner likes Arctic conditions inside – it has a hunger to match.
Over three days – Friday afternoon to Monday morning – we added in 170kWh to the car. The first 70kWh because it was on a low charge when we got it, the remaining 100kWh because that is what we used in our 403km of trips around the Byron hinterland.
All but a few kWh, added as we experienced the joy and convenience of dining and charging at a local eatery, came from the house.
Of course, that is beyond the resources of this house’s rooftop solar and battery storage, although it was interesting to note that the battery was perfectly capable of meeting the Model X’s charging needs (7kW) and the home during the evening.
And here’s the thing. Not all EVs will be as big or heavy on consumption as the Model X. An average daily trip in Australia is around 40-50kms. So in Model X, that might need 10kWh of topping up, or in the case of a smaller and cheaper EV, closer to 5kWh.
You see what the potential is here? A household solar array and battery storage system that can provide not just for the household needs, but for the car as well.
And that can be a two-way street. If the home solar and battery don’t have enough charge, the EV can go down to the nearest fast-charger and top up – and bring it back.
A battery the size of the Model X can keep a regular house going for nearly a week, and one like this holiday home for a few days.
Tesla have not indicated if or when they will offer such vehicle-to-grid technology, but when it does happen it offers all sorts of options and scenarios: from consumers taking their homes and cars off grid; to an expanded distributed energy system where EVs offer significant storage and other services to the grid, and where the centralised fossil fuel generators are used and needed less.
That’s what makes experiencing the Tesla eco-system so interesting, and exciting. It may only be within the reach of the well-off for now, but if offers a clear vision of the future – and one that is approaching fast.
As for the Model X, well it is a stunning machine – as you’d expect from the price, and our road test will appear shortly in our EV-focused website, The Driven.
And the house? It was magnificent, as you would expect from something that left its owners little change from $4 million, and costs some $1,400 a night to rent.
But not everything is perfect. The shampoo and gel are too far from the shower and I found myself having to shuffle back and forth. That’s not as much of a deal breaker as the anticipated lack of roof-rack options on the upcoming Model 3, but details do count.
Note: Tesla Destinations opens on February 18. It includes competition to win a week-long stay in the home, with car.
You can listen to our previous The Driven podcasts here, or on your favourite podcast platform.