CA kickstarts Musk’s new battery empire

With now-customary flair, Tesla chief Elon Musk announced his company’s latest foray — this time, into residential and commercial battery power storage.

Aiming high

The Los Angeles Times reported that “Musk introduced a new line of residential and commercial batteries [recently] in a dramatic announcement at the automaker’s design studio in Hawthorne. He outlined a vision of off-the-grid homes and businesses and remote villages powered by sunshine.”

According to Musk, the Times recounted, the new initiative reflected an ambition “to change the fundamental energy infrastructure of the world. What we will see is something similar to cellphones and land lines where cellphones actually leapfrogged land lines.”

Target and Walmart stores have already begun testing the devices, which could dramatically change the way they power their enormous, warehouse-like commercial spaces.

Regional rivals

The move rippled swiftly through Silicon Valley, where Tesla has become the most prominent, but hardly the only, battery purveyor in town. In a demonstration of PayPal founder Peter Thiel’s theory that innovators should seek monopolies, not marginal improvements, competition has ratcheted up in the power-storage space, as Business Spectator noted, because the market has not yet matured:

“‘So many companies are fighting over a market that’s practically nonexistent right now,’ said Haresh Kamath, energy storage expert at the Electric Power Research Center in Palo Alto, California. ‘Tesla is betting they can produce a charismatic product that consumers will want to buy — like what Apple did with the iPhone.’ Tesla will have to sell eight home battery systems to equal the size of each battery pack going into one of its luxury cars, he said.”

West coast dominance

In a potent sign of the business importance of location and tech infrastructure, California quickly emerged as the introductory market for top-tier firms taking advantage of the new batteries. As VentureBeat reported, “Amazon Web Services, the largest public cloud around, has started a pilot of the new stackable battery units Tesla unveiled[.]”

“‘We’re excited to roll out a 4.8 megawatt hour pilot of Tesla’s energy storage batteries in our U.S. West (Northern California) Region,’ James Hamilton, distinguished engineer at AWS, said in a statement in press materials for today’s product launch. ‘This complements our strategy to use renewable energy to power our global infrastructure.'”

Solidifying California’s significance in the battery market, solar power firm SolarCity — co-founded by Musk’s cousin, Peter Rive — also announced plans to use Tesla batteries to share revenues with customers whose homes are connected to the power grid.

“SolarCity’s financed battery-solar residential system offerings will include a standard customer contract that ‘essentially splits revenues that grid services provide,’ he said,” according to GreenTechGrid.

And though both firms have benefited from millions in subsidies granted by the Self-Generation Incentive Program established by the Golden State, GreenTechGrid noted, Rive insisted that, “for this product, we are not counting on any SGIP incentives whatsoever.”

Nevertheless, state regulators’ impact on energy markets appeared set to influence the tech business in other ways. In yet another extension of Tesla’s power on the west coast, the company’s former senior finance director, Ryan Popple, recently secured “a $3 million grant from the California Energy Commission to help set up a manufacturing plant in Los Angeles County” for Proterra, the electric bus company where he has become CEO, as Government Technology reported.

“Popple says rechargeable buses have benefits that diesel can’t match, especially in California. By 2030, Gov. Jerry Brown wants to cut in half the state’s use of oil for transportation. And California’s urban areas, particularly the Los Angeles region’s massive sprawl, constantly struggle with air pollution. Electrifying public transportation within cities would be a substantial step forward, Popple said.”