Last week an immigrant from South Africa made a decision that is both altruistic and business-savvy. Elon Musk, inventor, billionaire and dreamer, announced that his superbly engineered electric car company, Tesla, would open up most of its patents and technology behind the company’s trademark electric cars (Huffington Post).
Nissan and BMW immediately jumped to start talks with Tesla on standardizing the charging network across the country, an infrastructure requirement necessary to get electric cars on the road in significant enough numbers to decrease petroleum use and help the environment.
Only 97 charging stations are operational in the United States, but Musk plans to have a Supercharging network that covers the entire country in just two or three years.
The number of cars really matters. Today, there are only 400,000 plug-in electric vehicles in the world. The U.S. has the most, with about 170,000, but compared to the billion-plus internal combustion engines on the planet (Wards), this isn’t anyway near the decimal point, as Musk quipped to Chris Hayes on MSNBC after the announcement.
In fact, we need over 800 million electric cars by 2040 in order to make any real dent in the carbon emissions from petroleum fuel. Those emissions, together with carbon emissions from fossil fuel power plants, make up the bulk of human-induced CO2 in the atmosphere.
Of course, the carbon savings from a fully-electric vehicle strongly depends upon how you charge it. Recent studies from National Academy of Science and the Union of Concerned Scientists (Hidden Costs of Energy and Alternative Vehicles and Fuels) conclude that the power grid must produce a majority of electricity from non-fossil fuel in order to realize the potential of electric vehicles. That Musk has doubled down on solar energy as well dovetails perfectly with this synergism (The Verge).
Tesla’s new Supercharging network will crisscross the other network that carves up the United States into different electric grid regions with substantially different energy mixes, making Musk’s network geographically dependent in its environmental benefits (State of Charge).
The dirtiest grid regions have over three times the CO2 emissions than the cleanest regions. The coal-dominated regions of the Rockies, Upper Plains, and parts of the Midwest have the highest CO2 emissions per kWhr while the regions that include California, New York, and the Pacific Northwest have the lowest emissions per kWhr.
So electric vehicles charged in Washington State (80% non-fossil electricity) yield emissions similar to gasoline-powered vehicles getting over 70 mpg. But cars charged in Indiana, where coal exceeds 90% of the electricity production, are not much greener than cars with internal combustion engines getting 30 mpg.
With all the focus on the new EPA carbon rules and China’s new push to replace coal as fast as possible with nuclear, gas and renewables, lost is the fact that without this transition to fully electric vehicles charged by non-fossil fuel power sources, we will not reach any of our atmospheric CO2 concentration goals.
The hurdle to any large change in how society operates is that it takes about 30 years to significantly impact a nation, let alone a world. Look at the appearance of the locomotive, England’s development of coal, the automobile, the telephone, United State’s development of oil, the internet, whatever. It takes over a generation for any innovation to move through a society, and we don’t have a lot of generations to waste before irreparable harm occurs to the planet from human activities. Some say we don’t even have one.
This is why Musk is so ready to share his knowledge and lose the corner he would have had on the market. He knows that the only way to achieve that number of reliable and environmentally-sound vehicles, in a short enough time to make a difference, is to work together, really together, like give up some profits to save the world.
Developing a spaceship company certainly gives Musk a unique global perspective (Electric, Space and Solar).
“I don’t really like patents, it’s not my favorite thing,” Musk said on a conference call with shareholders and the press last Thursday. “I think there is a lot of abuse of the patent system these days. It’s rare to read that some individual inventor [created] technology benefitting [society]. That’s not what you usually read about. I can’t remember the last time I read about something like that” (The Atlantic).
But this patent move also boosts Tesla’s over all electric strategy, especially battery manufacturing (The Fool). Tesla also announced plans to build a battery Gigafactory in the U.S. that Musk hopes will produce more advanced batteries than anyone in the world (The Verge). By partnering with other battery-manufacturing partners in an effort to improve the economics of scale, Tesla is sure that its battery costs will drop by 30% only one year after its Gigafactory begins operation.
Not everyone is enamored of Musk’s move (The Fool). Daniel Kline thinks this announcement is a bad business decision. If one of the auto giants decides to compete, says Kline, it would have the resources to eliminate Tesla altogether.
I think, however, we can depend on the cautious greed of Corporate America to let this brilliant innovator get a head start. At zero to sixty in 3 seconds, Elon Musk only needs a minute.