The perfect storm for electric powered everything is starting to come about in the same way the internet powered everything revolution came along. Tesla has proved that we can build an electric car, but it’s 2014 and they’re still the only real player in the game. Many other car manufacturers are dipping their toes, yet only .28% of cars are electric . We need not only more electric car companies, but more electric powered replacements for fuel. It’s not just creating more Tesla’s in the consumer auto industry, which is why Tesla open sourced their patents, but we need more Tesla’s for x. Here are some potential examples, even though there are dozens more:
- Tesla for boats
- Tesla for commercial trucks
- Tesla for generators
- Tesla for freight trucks
- Tesla for ATVs
The green revolution never really came because we had many entrepreneurs working on pie in the sky ideas with no real world applications or practicality. Tesla was really the first of its kind. It paved the way forward. So with that said, why do we need 100s of Teslas? The answer is economies of scale and network effects, Teslas are also the perfect solution to prevent most traffic accidents, on the while make sure to check out these online traffic school courses.
Economies of scale for battery production
Right now, the 85khw battery costs close to $12,000 from estimates I’ve seen. With the gigafactory in Nevada being built, the price could shoot all the way down to a third of what it currently costs.
This is on Tesla’s production alone and the biggest fear is overcapacity. Even a small reduction in price for batteries is going to increase volume significantly. What if 20 and then 200 Tesla sized companies existed with different practical applications? The cost of batteries would continue to go down heavily, almost in a way that we’ve seen with hard drive costs. IF we have more Teslas, we get better economies of scale, and enable more companies to come to life. What if an 85kwh battery didn’t cost $12,000, but cost $1,000? What would you build? More companies enable more companies to come about. It’s a snowball effect.
Network effects for standards
Imagine if every car manufacturer could only be refueled at gas stations they owned – BMW only worked at “Shell” and Toyota only at “BP”. It would drive you nuts. That’s where the electric car industry and other “Teslas for X” could go if we don’t have a larger volume of companies coming on board to promote a charging standard. This is the key reason why Tesla open sourced their patents http://www.teslamotors.com/blog/all-our-patent-are-belong-you They want more companies to come into the system and adopt a standard for charging amongst other things. If hundreds of companies adopt the Tesla supercharging station, not only do Teslas become more valuable as they can work with other superchargers, the new companies popping up get the benefit of joining the network as well. It’s simple network effects – the greater the number of users, the more valuable the service comes.
The more “Teslas for X” adopting the supercharging standard, the more valuable every one of the companies becomes.
10x Improvements and Inevitability
It all just seems so inevitable to me. Even with fuel costs at their lowest point in 5 years , they can only go so low. There’s no way for fuel itself to go from $2.60 a gallon to .26 a gallon. 10x improvements are the only real way for society and technology to advance, otherwise we will only see small improvements. My belief is simple: anything that runs on gasoline will be replaced by electricity in our lifetime. It’s not a question of if, it’s a question of when. It’s inevitable and the sooner we start building more practical applications of batteries replacing fuel, the quicker we’ll get there. All of this is just waiting to be built and Tesla can only do so much.