Tesla plugs into new market with home battery system
FOSTER CITY, Calif . — Never lacking daring ideas, billionaire entrepreneur Elon Musk is determined to jolt the electricity market.
The CEO of electric carmaker Tesla Motors hopes to park hundreds of millions of large, solar panel-connected batteries in homes and businesses so the world can disconnect from power plants — and he can profit. On Thursday night, before an adoring crowd and a party-like atmosphere, Musk unveiled how he intends to do it.
Musk took the stage at Tesla’s design studio, an audience of drink-toting enthusiasts cheering him on, in a scene fitting for an audacious dreamer renowned for pursuing far-out projects. Colonizing Mars is one of Musk’s goals at Space X, a rocket maker that he also runs.
“Our goal here is to fundamentally change the way the world uses energy,” Musk told reporters.
Although Tesla will make the battery called “Powerwall,” it will be sold by a variety of other companies. The list of partners includes SolarCity, a solar installer founded by Musk’s cousins, Lyndon and Peter Rive. Musk is SolarCity’s chairman and largest shareholder.
As with Tesla’s electric cars, which start around $70,000, the battery might be too expensive for most consumers. The system will carry a suggested price of $3,000 to $3,500, depending on the desired capacity. Installation will be extra. That could discourage widespread adoption, especially for a product that may only have limited use.
“I don’t believe this product in its first incarnation will be interesting to the average person,” conceded Peter Rive, SolarCity’s chief technology officer. Rive, though, still expects there to be enough demand to substantially increase the number of batteries in homes.
Musk is so encouraged by the initial demand that he believes Tesla and other future entrants in the market will be able to sell two billion battery packs around the world — roughly the same number of vehicles already on roads. Although that may sound like a “super crazy” goal, Musk insisted it “is within the power of humanity to do.”
It will take a long time to get there. Tesla hopes to begin shipping a limited number of Powerwall batteries this summer in the U.S. before expanding internationally next year.
The long-term goal is to reduce the world’s reliance on energy generated from fossil fuels while creating regional networks of home batteries that could be controlled as if they were a power plant. That would give utilities another way to ensure that they can provide power at times of peak demand.
For now, the battery primarily serves as an expensive backup system during blackouts for customers like David Cunningham, an aerospace engineer from Foster City, Calif. He installed a Tesla battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance.