Elon Musk (Tesla): Sustainability Savant or Economic Genius…why not both?

teslaElon Musk, CEO and co-founder of Tesla Motors Inc has repeatedly stated that he wants ‘everyone to be driving an electric car’ both on his blog but also in press conferences. He feels that “the overarching purpose of Tesla Motors is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy…the primary, but not exclusive, sustainable solution” (Musk, Blog 2006).

Musk goes behind just talking/wrTeslas Business Modeliting about this goal; the business strategy undertaken by Tesla Motors and its recent ‘sharing of patents’ announcement provide a road map for how to get there.

 

 

All Our Patent Are Belong To You

 

One of the major concerns for electric vehicles are their batteries; they encompass the largest single expenditure of an electric vehicle, will likely need to be replaced at a large cost and leave many people questioning the environmental impact of these ‘dead’ batteries. Tesla has addressed this concern through substantial investment in R&D for battery design, development and disposal/re-use  as well as the development of a battery gigafactory which is slated to produce over 500,000 electric vehicle batteries/year once it is up and running. This is more EV batteries than all the previous years world production combined! 

Battery demand This new factory is expected to drop the battery prices world-wide by more than 30% which in turn will enable the creation of an affordable, fully functional electric vehicle for the masses.

Given that Tesla’s current production is only around 25,000 vehicles for 2013 with goals of doubling this by 2015, there is still a substantial gap between the number of batteries they will produce and the number of vehicles they will produce. This means they need to become the ‘go-to’ supplier of electric vehicles for all the other car manufacturers. This is where their decision to not pursue patent infringement comes into play. It is in Tesla’s best interest if more vehicle manufacturers produce electric vehicles, it supports both their objective of converting everyone away from fossil fuel but it also helps them grow their bottom line through on-going battery sales. While it is true that none of the car manufacturers need to buy batteries through Tesla, Tesla will have the most innovative, low-cost, environmental batteries around in quantities large enough to supplier other manufacturers and so the logical thing for many companies to do will be to buy from Tesla.

And so I pose the question, in opening up their electric car patents in conjunction with building a battery gigafactory, is Elon Musk a Sustainability savant, truly concerned with improving the health of our planet, OR, a very savvy business man who’s actions have gained him tons of positive press while growing the market and thus enabling Tesla to reap long term profits ?

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Posted in community, corporate sustainability, economic development, energy, sustainable living, sustainable technologies

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