News: Energy

The popularity of South Australia’s Tesla-powered Virtual Power Plant (VPP) initiative which began last year is now over-subscribed, according to the state’s government officials. In response, plans are underway for the next phase of the project that will expand the VPP into a 250MW/650MWh system connecting 50,000 households.

“Results from Phase 1 and Phase 2 are already contributing towards the design of the potential Phase 3 to enable as many families as possible to benefit from this program,” Energy Minister Dan van Holst Pellekaan said in a media release on the subject.

Supported by a $2 million grant and a $20 million loan from the South Australian (SA) Renewable Technology Fund, Phases I and II of SA’s VPP involved the installation of 5 kW solar panels and a 13.5 kWh Tesla Powerwall 2 battery storage unit in 1,100 low-income households. The homes are linked together to form a virtual grid which can both ease power demands from the main grid during peak consumption times and act as a backup power source during blackouts. The final installations in this set are scheduled to be operational by October 2019, according to the SA government’s official page on the project.

Phase III of the VPP project will require additional funding and all three phases are estimated to cost a total of $800 million when complete. Private investment is expected to fill this need, which is likely to be a significant part of the SA government’s planning efforts. The current set of customers using the Phase I and II installations are offered an energy rate that’s 20% less than the main grid rates, thus making the program very popular with attractive investment potential.

Tesla is also participating in another South Australia battery program called the Home Battery Scheme. Under this initiative, AU$6,000 (US$4,300) subsidies are being offered to 40,000 homes in the state towards the purchase of lithium-ion battery systems, including Tesla’s Powerwall 2. Unfortunately, the Powerwall price may still be out of reach for many of SA’s homeowners even with the discount. In January, Ronald Brakels of Solar Quotes was given a AU$9,300 (US$6,600) post-subsidy estimate for the Powerwall 2 with installation, which is likely to be unaffordable for customers who would most benefit from a system intended to lower power bills. The Virtual Power Plant plan provides the batteries and solar panels to participants for free.

Tesla’s Powerpack 2 is also helping support other power grids in South Australia. The company’s 100 MW/129 MWh Powerpack farm at the Neoen’s Hornsdale Wind Farm near Jamestown provides a battery storage solution equivalent to about 1,300 Model S or Model X 100D consumer vehicles. Since it went online in 2017, the Hornsdale system has helped solve power shortages and manage summertime peak load to improve the reliability of South Australia’s storm-damaged electrical infrastructure. The 640 Powerpack units charge using renewable energy from the Hornsdale Wind Farm and then deliver electricity as needed.

A building permit filed by Tesla for its electric vehicle factory in Fremont, CA has shown that the electric car maker is looking to build a structure to evaluate its long-awaited Solar Roof tiles and their installation process. The structure’s permit was issued to Tesla in July.

The description of the project is straightforward. “Construction of a test structure to evaluate Tesla Solar Roof product and installation process. Fire Sprinklers, Fire Alarm, Truss Design, and Solar Designs are deferred submittals,” Tesla wrote. 

The building permit, which was initially mentioned in a CNBC report, suggests that Tesla’s development of its Solar Roof tiles, which have seen notable delays since the product was initially unveiled in October 2016, is moving forward. It should be noted that Elon Musk has remained optimistic about the solar power-generating shingles despite these delays, noting during the Model Y unveiling that 2019 will be the “Year of the Solar Roof and Powerwall.”

The delays in the Solar Roof’s rollout have weighed down the company’s energy business. As noted by Tesla in its Q2 Update Letter, the under-utilization of the solar shingles have proven detrimental to the company’s margins for the quarter. “Higher costs from temporary manufacturing under-utilization of our Solar Roof ramp have further contributed to a decrease in margins,” Tesla wrote. 

For Tesla to properly ramp the Solar Roof, the company would have to increase the production of the shingles in Gigafactory 2, the company’s plant in Buffalo, NY. So far, Gigafactory 2’s operations have remained conservative, though the electric car maker’s first annual report to New York’s Empire State Development Corp. back in May has revealed that it had exceeded its 2019 jobs target for the state. 

Tesla’s filings stated that the company had 632 full-time workers through the end of April, comprised of 329 employees at Gigafactory 2 in Buffalo and around 300 more across New York. The number exceeded the state’s requirement of having at least 500 employees in the state by April 30, 2019, though it is still notably far from next year’s target, which requires Tesla to employ 1,460 workers in the state, including at least 500 at Gigafactory 2. If Tesla will indeed ramp the production of the Solar Roof this year, the company would likely start hiring more employees for the facility in the near future. 

Elon Musk, for his part, has remained hopeful for the Solar Roof tiles and their eventual release. In a recent update on Twitter, Musk noted that he hopes to ramp Solar Roof production to a rate of about ~1,000 per week by the end of 2019. The update promptly incited furor from the company’s skeptics, with some critics alleging that the tweet violated Musk’s updated settlement terms with the Securities and Exchange Commission that took effect last April. Despite these strong reactions, the SEC’s press office has so far declined to comment if Musk’s Twitter update violated the CEO’s settlement with the agency.

After Tesla’s worldwide success with Powerpack battery grid installations, the company has now designed and engineered a new battery product called the Megapack made specifically for utility-scale projects. This larger battery pack has a 60% increase in energy density over the current Powerpack and boasts up to 3 megawatt hours (MWhs) of storage capacity per pack as a result. Megapacks also come completely assembled from Tesla’s factory for quick installation, altogether providing customers with savings in both cost and time.

Battery storage grids are important in the global energy grid’s transition to sustainable energy sources, and the Megapack’s massive capacity and scalability will make it an ideal choice for regions looking for a simple and cost-efficient ways to convert or support their current infrastructure. “Using Megapack, Tesla can deploy an emissions-free 250 MW, 1 GWh power plant in less than three months on a three-acre footprint – four times faster than a traditional fossil fuel power plant of that size,” Tesla stated in their announcement.

Along with an AC interface, the Megapack also includes DC-connectivity for solar grids, essentially giving it plug ‘n play capability for any type of power grid interface. Tesla’s Megapack product page further describes its “All-in-One-System” design:

“Every Megapack arrives pre-assembled and pre-tested in one enclosure from our Gigafactory—including battery modules, bi-directional inverters, a thermal management system, an AC main breaker and controls. No assembly is required, all you need to do is connect Megapack’s AC output to your site wiring,” Tesla detailed.

Tesla’s latest product is also very competitive compared to other utility power storage options available on the market. Thanks to its high-density energy storage capacity and modularity, the Megapack needs 40% less space and 10x fewer parts than comparable systems, according to data published on Tesla’s product page. This will bode well for areas with space constraints or simply desiring a smaller footprint for energy storage.

The Megapack will be utilized for an upcoming energy storage project hosted by Pacific Gas and Electric Company (PG&E) in Moss Landing, California once final approval from the state’s Public Utilities Commission is received. Under the project, Tesla’s battery-powered utility installation will store 182.5 megawatts of excess solar or wind energy to provide supplemental power during peak grid times for up to 4 hours at a time. It will take the place of natural gas “peaker” power plants, offering a much more efficient and clean alternative for Moss Landing’s energy needs.

The original Tesla Powerwall was launched in 2015 and has since been used for storage projects worldwide by scaling its 210 kWh capacity. In the UK, one of the country’s largest bus operators is using Powerpacks to charge its fleet of 9 all-electric buses and has received positive reviews from both riders and drivers. The lack of diesel fumes is both a notable and welcome change. In South Australia, Tesla’s Hornsdale Powerpack installation ultimately became the largest lithium-ion battery in the world. Interestingly enough, Volkswagen’s Electrify America also recently decided to purchase and install Tesla Powerpacks at over 100 of its charging stations, totaling a capacity of 350 kWh with 210 kW rapid charging compatibility.

Tesla’s full Megapack product announcement is provided below:

Introducing Megapack: Utility-Scale Energy Storage

Less than two years ago, Tesla built and installed the world’s largest lithium-ion battery in Hornsdale, South Australia, using Tesla Powerpack batteries. Since then, the facility saved nearly $40 million in its first year alone and helped to stabilize and balance the region’s unreliable grid.

Battery storage is transforming the global electric grid and is an increasingly important element of the world’s transition to sustainable energy. To match global demand for massive battery storage projects like Hornsdale, Tesla designed and engineered a new battery product specifically for utility-scale projects: Megapack.

Megapack significantly reduces the complexity of large-scale battery storage and provides an easy installation and connection process. Each Megapack comes from the factory fully-assembled with up to 3 megawatt hours (MWhs) of storage and 1.5 MW of inverter capacity, building on Powerpack’s engineering with an AC interface and 60% increase in energy density to achieve significant cost and time savings compared to other battery systems and traditional fossil fuel power plants. Using Megapack, Tesla can deploy an emissions-free 250 MW, 1 GWh power plant in less than three months on a three-acre footprint – four times faster than a traditional fossil fuel power plant of that size. Megapack can also be DC-connected directly to solar, creating seamless renewable energy plants.

For utility-size installations like the upcoming Moss Landing project in California with PG&E, Megapack will act as a sustainable alternative to natural gas “peaker” power plants. Peaker power plants fire up whenever the local utility grid can’t provide enough power to meet peak demand. They cost millions of dollars per day to operate and are some of the least efficient and dirtiest plants on the grid. Instead, a Megapack installation can use stored excess solar or wind energy to support the grid’s peak loads.

Tesla developed its own software in-house to monitor, control and monetize Megapack installations. All Megapacks connect to Powerhub, an advanced monitoring and control platform for large-scale utility projects and microgrids, and can also integrate with Autobidder, Tesla’s machine-learning platform for automated energy trading. Tesla customers have already used Autobidder to dispatch more than 100 GWh of energy in global electricity markets. And, just as Tesla vehicles benefit from continued software updates over time, Megapack continues to improve through a combination of over-the-air and server-based software updates.

As the world’s transition to sustainable energy continues to accelerate, the market for advanced battery storage solutions is growing rapidly. In the past year alone, we have installed more than 1 GWh of global storage capacity with our current storage products, Powerwall and Powerpack, bringing our total global footprint to more than 2 GWh of cumulative storage. With Megapack, this number will continue to accelerate exponentially in the coming years.

To learn more about Megapack and how our energy storage solutions for utilities and commercial customers are accelerating the transition to sustainable energy, visit tesla.com/megapack.

The long-awaited production ramp of the Tesla Solar Roof might finally be at hand. In a recent update, Elon Musk noted on Twitter that Tesla is currently spooling up the special shingles’ production line as quickly as it can, which would hopefully allow the company to manufacture the Solar Roof at a rate of around ~1,000 per week by the end of 2019. 

Musk’s comments came as a response to Tesla owner-enthusiast and Ride the Lightning podcast host Ryan McCaffrey, who inquired about the Solar Roof’s rollout. Musk had previously mentioned that the Solar Roof’s release is taking longer than expected due to the long development cycle for the shingles. As such, customer installations of the Solar Roof have begun, but only in small quantities. 

An impending production ramp of the Solar Roof, even at a rate of around 1,000 per week, bodes well for the potentially revolutionary product. Tesla’s Solar Roofs, after all, stands as a critical component of Elon Musk’s Master Plan, Part Deux, which involves the creation of “stunning solar roofs with seamlessly integrated battery storage,” thereby helping customers attain power independence. 

During the Model Y unveiling event, Elon Musk mentioned that Tesla would be focusing on its energy products in 2019, even going so far as to state that 2019 will be the “Year of the Solar Roof and Powerwall.” Two quarters into the year, and this ramp is yet to come to fruition. 

Falling prey to a delayed rollout, the Solar Roof tiles have become a notable point commonly used by Tesla’s critics when speaking about the company’s alleged “broken” promises. A report was even published on Reuters last May stating that only around 21 Solar Roof installations have been completed as of the end of February 2019. Among the report’s sources was a former Tesla employee, who claimed that only a few other installations had been completed in the northeastern United States. 

Tesla, for its part, released a statement responding to the Reuters report. Addressing the news agency, a Tesla representative explained that “the number of solar roofs you cite in the story is low and unrepresentative as we are actively installing the Solar Roof in eight states currently.” With Elon Musk’s recent Twitter update seemingly suggesting that a Solar Roof ramp will soon be at hand, the number of installations across the United States will likely grow in the near future.

In a recent interview with Australian auto publication The Driven, Nissan’s global head of electric vehicles Nic Thomas shared a rather surprising view of Tesla’s big battery installation in South Australia, which is widely credited for helping residents reduce their dependence from gas cartels operating in the region. 

During the launch of a new version of its popular all-electric 40 kWh Leaf in Melbourne, the Nissan executive boldly declared that Tesla’s Powerpack Farm in South Australia is a waste of resources. “It’s a complete waste of resources because what we can do is have cars that are also batteries and those cars are parked most of the time,” Thomas said.

Thomas’ statement comes as he was discussing the new Leaf’s vehicle-to-grid/vehicle-to-home (V2G/V2H) system, which will allow the all-electric car to serve as a home battery unit. With the system in place, the Leaf will not only store energy by plugging into a home or business; the vehicle could also serve the energy back when needed. V2H is already in use in countries such as Japan, and a release in Australia is expected within six months. 

The Nissan executive noted that the Leaf’s V2G system has the potential to help homeowners save money, especially if the vehicle charges through a rooftop solar system during the day, and uses its stored energy to power appliances and lights at night. 

“The way we distribute and consume energy is fundamentally inefficient … what we need is flexibility in the system. It’s great that we’ve invested all this money in renewable energy, but fundamentally we’re wasting most of that energy because it’s all being generated in the middle of the day when we don’t really need it,” he said. 

Tim Washington, CEO of charging solutions provider Jetcharge, noted that Nissan V2H technology has a lot of potential, considering that vehicles spend much of their time just parked, or in the case of electric cars, plugged in. 

“Cars will be an energy asset first, and a mobility asset second. What I mean by that is you are going to use your cars probably more as batteries than as vehicles. As we know, vehicles are parked 90% of the time – that is one of the criticism leveled at cars. But what if they are the most efficient asset that you have because it’s doing work even when it’s parked? That’s when bidirectional charging comes into play,” he said. 

While V2G technology has a lot of potential that even Tesla CEO Elon Musk recognizes, the Nissan executive’s casual dismissal of the 100MW/129MWh Hornsdale Power Reserve in South Australia seems misinformed at best. Since coming online, after all, the Powerpack farm, whose size is equal to around 2,500 40 kWh Nissan Leafs, has seen widespread acclaim for its speed and sophistication. 

Even before it was officially activated, the big battery was called into action, injecting 70 MW of stored wind energy into the market; and just two weeks after it went online, it stepped in to support the grid when a coal generator in the region failed. This rapid response, which has pretty much changed the energy game in South Australia, would likely be pretty challenging to match with a fleet of Nissan Leafs. V2G definitely has its uses, and it will be beneficial to Nissan Leaf owners; but ultimately, big batteries like the Hornsdale Power Reserve are on a completely different level of energy storage.

It appears that Tesla Energy’s highly-anticipated ramp is picking up some speed. With Model 3 production humming at levels that allow the company to begin distributing the all-electric sedans to international markets, the company seems to be intent in gaining back some momentum in the United States’ residential solar market, a segment that was, at one point, dominated by SolarCity. 

Tesla Model 3 owner Nick Wood and his family had been looking to add solar panels and a home battery system to their house in Santa Rosa, CA. The home had been affected by the 2017 wildfires, and PGE had advised residents in the area that there will be power interruptions during windy, dry conditions. With the family being all-in on electric vehicles — a Tesla Model 3 and two Chevy Bolts under a lease — the Woods needed a way to achieve power independence from the grid. 

The family filed applications for two projects: one for their main house with about 40 kW of solar panels and five Powerwall units, and another for a second house with 8.2 kW of solar and two Powerwalls. Both applications were filed around June 10. Following a site visit and once the loan terms and other financials of the project were approved, Tesla informed the family that the first Powerwall and solar panels were set to be installed on July 2. That was just over three weeks since the system was ordered. 

@Tesla @elonmusk @ElectrekCo @Teslarati @ValueAnalyst1 Tesla solar easy as ordering a car 3 weeks from order to install, less than cost of power per month. Looks like 2 power walls and 26 panels will be installed in 1 day. Longer to get county/PGE sign off

— Nick Wood (@nick_waya) July 2, 2019

The Tesla installers arrived at around 9 a.m. on the day of the installation. The team worked simultaneously, with some working on trenches for the system’s power connections, others setting up the Powerwalls, and the rest installing the solar panels. Much to the Woods’ appreciation, the entire project was fully completed before the end of the day. The team even set up two electric car chargers at no extra cost. The Tesla team also gave the Woods their email addresses so that they could forward any pertinent information about the site to the installers of the main house’s upcoming 40 kW solar panels and five Powerwalls. 

In a message to Teslarati, Nick Wood mentioned that the installers had been finishing around one Tesla Energy project per day. The installers also stated that they have been particularly busy as of late, with an appointment with a residential solar and/or Powerwall customer being scheduled daily. Quite notably, Wood stated that his family now has to wait around 1-5 weeks for the county inspection so that they can activate the system. That’s potentially longer than the time it took for the solar panels and Powerwalls to be ordered and installed. 

A Tesla Solar and Powerwall 2 installation at Santa Rosa, CA. (Photo: Nick Wood)

A Tesla Solar and Powerwall 2 installation at Santa Rosa, CA. (Photo: Nick Wood)

A Tesla Solar and Powerwall 2 installation at Santa Rosa, CA. (Photo: Nick Wood)

Granted, part of the reason behind the quick turnaround time of the Woods’ residential solar installation could be their location. Being in California, the family lives in a state that is heavily saturated by Tesla. Nevertheless, the efficiency exhibited by the installers, as well as the team’s mention of busy weeks filled with project after project, hints at a ramp in the company’s Energy initiatives. 

This bodes well for Tesla’s residential solar business, which has seen a decline since the company acquired SolarCity in 2016. Since SolarCity’s peak of commanding 32.6% of the US market in 2014, Tesla’s presence in the country’s residential solar segment as shrunk, hitting only 6.3% during Q1 2019. Nevertheless, hints of a potential ramp started emerging last year, when Tesla started dramatically reducing its customer acquisition costs by spending only $0.40 per watt to acquire customers. This is far lower than competitors such as Vivint, which has customer acquisition costs of $0.94 per watt, and Sunrun, whose costs run at $0.90 per watt. 

Tesla Energy is pretty much a sleeping giant for now. The business has so far been away from the spotlight, especially amidst the production ramp of the Model 3, but it has a lot of potential. Legendary investor Ron Baron, for one, has estimated that Tesla Energy on its own could be worth $500 billion. Elon Musk and the company’s executives, for their part, have noted that a ramp in Tesla Energy’s activities is underway, with the CEO stating during the unveiling of the Model Y that 2019 will be the “Year of the Solar Roof and Powerwall.”

The results of Wood Mackenzie Power & Renewables’ rankings of solar providers in the United States has revealed some interesting details about Tesla Energy’s current strategies. During the first quarter of 2019, Tesla Energy was overtaken by Vivint Solar as the US’ second-largest residential solar provider. Despite this, the electric car and energy company was able to dramatically reduce its customer acquisition costs, a key component in the solar business that could result in long-term advantages.

During the first quarter of 2019, Tesla claimed 6.3% of the US market, a far cry from Solar City’s peak of 32.6% in 2014. These declines do not seem to mean that Vivint gained market share at Tesla’s expense, as the solar provider also saw its market share shrink in Q1, from a high of 11.6% in 2014 to 7.3% in 2019. Considering the current trends in the US’ residential solar market, WoodMac analysts are currently forecasting a nearly flat 3% growth for the year. Senior WoodMac analyst Austin Perea noted that a significant contributor to this trend is Tesla’s softer efforts at pushing its solar business, as indicated by the company’s ongoing shift to an online sales model.

Yet, despite the downtrend in Tesla’s market share in the US residential solar market, the company has been exhibiting a dramatic reduction in its customer acquisition costs. During the final six months of 2018, for example, Tesla spent around $0.40 per watt to acquire customers, and this amount would likely get even lower. WoodMac analysts have stated that Tesla could spend as little as “close to a quarter” per watt by the end of 2019.

It should be noted that customer acquisition costs are currently among the most expensive portions of residential solar systems, accounting for 21% of total expenses in 2018. Vivint and Sunrun, the two residential solar providers that have overtaken Tesla in market share over the years, are no exception. WoodMac notes that currently, Vivint’s customer acquisition costs stand at $0.94 per watt, while Sunrun’s costs run at $0.90 per watt. Perea notes that Tesla’s notably lower customer acquisition costs are partly due to the company’s diverse business.

“With current saturation levels, customer acquisition costs are not going to come down. Tesla understands where the cost stack is right now, and they’re able to rely on other business units. They’re diversified in a way that other models aren’t. I’m not saying that Tesla is doing the right thing here, but I think they understand that existing customer acquisition costs aren’t going anywhere. It’s becoming a fairly well-respected product at a cheaper price point than some of its primary competitors. That’s because they’ve been reducing their customer acquisitions costs actively,” the WoodMac senior analyst said.

Tesla CEO Elon Musk has pledged to ramp the company’s solar business, which, according to legendary investor Ron Baron, has the potential to be worth $500 billion on its own. Tesla Energy has largely taken a backseat to the company’s electric car business, particularly during the Model 3 ramp. Nevertheless, with the electric sedan’s production humming along, it might not be too long before Tesla commits itself to ramping its residential solar business fully.

Tesla’s first annual report to New York’s Empire State Development Corp. has revealed that the electric car and energy company exceeded its 2019 jobs target for the state. Tesla’s filings reveal that the company has 632 full-time workers through the end of April, comprised of 329 employees at Gigafactory 2 in Buffalo and around 300 more across New York.

Tesla was required to have at least 500 employees in New York by April 30, 2019 as part of its commitment to the state, which granted $750 million in subsidies for the company’s solar factory in Buffalo, NY. Gigafactory 2 currently has over 700 workers, comprised of around 400 full-time workers from Panasonic and about 300 from Tesla. By the end of April next year, Tesla is expected to employ 1,460 workers in the state, including at least 500 at Gigafactory 2.

The annual report also indicated that Tesla had invested a total of $381.9 million in New York as of April 30, including $179.3 million in the previous year.

Apart from providing the specifics of its employment figures in New York, Tesla also announced that it has added a new manufacturing line to the solar factory. The new line is designed to assemble the electrical components of Tesla’s Supercharger V3 stations, which are capable of peak charge rates of up to 250 kW. Considering that Tesla is particularly aggressive with the expansion of its Supercharger Network, the V3 line in Gigafactory 2 would likely result in even more jobs for the state.

A spokesman for Tesla provided the following statement about the diversification of its activities in Gigafactory 2. “In addition to scaling production of Solar Roof, Tesla is also diversifying its presence in Buffalo by manufacturing and assembling Supercharger and energy storage components at Gigafactory 2. We’re committed to investing in Buffalo and the state, and the new power electronic lines will deliver more high-tech jobs while supporting Tesla’s energy storage products and global Supercharging infrastructure,” the spokesperson said.

Gigafactory 2 is a facility designed to produce the company’s Solar Roof tiles, which look like conventional roofing material but are capable of functioning like solar panels. The tiles are part of Elon Musk’s vision of promoting a low-carbon lifestyle for Tesla’s customers, since electric car owners could power their vehicles from the energy gathered by their Solar Roofs. Unfortunately, the Solar Roof ramp has been slower than expected, with customer installations only beginning in small quantities. Elon Musk, for his part, has pledged to ramp the product this year, noting during the Model Y unveiling that 2019 will be the “Year of the Solar Roof and Powerwall.”

A recent report from Reuters has claimed that the “great majority” of solar cells currently being manufactured by Panasonic Corp at Tesla’s Gigafactory 2 in Buffalo, New York, are being exported to other countries. Citing an anonymous employee who reportedly works in the facility, the publication noted that Tesla is only sporadically buying the solar cells produced by its Japanese partner, resulting in Pansonic selling most of the cells it produces on the site to other solar module manufacturers.

Back in 2016, Tesla and Panasonic announced that they would be collaborating on cell and module production in the Buffalo, NY facility, with the electric car maker making a long-term commitment to purchase cells produced by the Japanese corporation. A principal aim for Gigafcatory 2 is the production of Tesla’s Solar Roof, which look like conventional roof tiles but function like solar panels. The tiles are a part of Elon Musk’s plan to encourage a low-carbon lifestyle among Tesla’s customers, since electric car owners can power their vehicles from the energy gathered by their Solar Roofs.

Unfortunately, the Solar Roof ramp has been slower than expected. Customer installations have begun, but only in small quantities. Musk explained this delay in the product’s ramp due to the long development cycle for the solar shingles. “That’s quite a long development cycle for — because anything that’s roof has got to last 30 years. So even if you do accelerate life testing as fast as possible, there’s still a minimum amount of time required to do that,” Musk said.

Citing data from California, Reuters noted that only around 21 Solar Roof installations were connected by the state’s and investor-owned utilities as of the end of February. A former Tesla employee further claimed that only a few other installations had been completed in the northeastern United States. Tesla, for its part, declined to comment on its purchase of cells from Panasonic or the actual figures of its Solar Roof installations, though an official from the electric car maker has stated that “the number of solar roofs you cite in the story is low and unrepresentative as we are actively installing the Solar Roof in eight states currently.”

Elon Musk has pledged to increase Tesla’s efforts in its Energy business this year, remarking during the unveiling of the Model Y that 2019 will be the “Year of the Solar Roof and Powerwall.” With the first quarter over and the second quarter well underway, it would be an excellent idea for Tesla to ramp its activities in Gigafactory 2, whose output and operations greatly affect Tesla’s Energy business.

Gigafactory 2 currently employs 800 workers, though Tesla is required to have 1,460 employees by this time next year to avoid penalties. Despite the slower-than-expected ramp of the facility and the products that it manufactures, the state of New York remained optimistic about the factory, as noted by Pamm Lent, spokeswoman for Empire State Development, in a statement to Reuters. “We have two of the leading clean energy companies in the world in Buffalo at the RiverBend facility. Tesla produces their innovative solar roof tiles ‎largely for development and testing with the goal of full-scale launch in the future. Panasonic is now the largest producer and employer at RiverBend with a customer base independent of Tesla,” Lent said.

Headed by vehicles like the Tesla Model 3, the electric car revolution is showing no signs of stopping. The auto landscape today is very different from what it was years ago. Before, only Tesla and a few automakers were pushing electric cars, and the Model S was proving to the industry that EVs could be objectively better than internal combustion vehicles. Today, practically every automaker has plans to release electric cars. EV startup Bollinger Motors CEO Robert Bollinger summed it up best: “If you want to start a (car company) now, it has to be electric.”

Catalysts for a transition

A critical difference between then and now is that veteran automakers today are coming up with decent electric vehicles. No longer were EVs glorified golf carts and compliance cars; today’s electric vehicles are just as attractive, sleek, and powerful than their internal combustion peers. The auto industry has warmed up to electric vehicles as well. The Jaguar I-PACE has been collecting awards left and right since its release, and more recently, the Kia Niro EV was dubbed by Popular Mechanics as the recipient of its Car of the Year award.

A survey by CarGurus earlier this year revealed that 34% of car buyers are open to purchasing an electric car within the next ten years. A survey among young people in the UK last year revealed even more encouraging results, with 50% of respondents stating that they want electric cars. Amidst the disruption being brought about by the Tesla Model 3, which has all but dominated EV sales since production ramped last year, experienced automakers have responded in kind. Volkswagen recently debuted the ID.3, Audi has the e-tron, Hyundai has the Kona EV, and Mercedes-Benz has the EQC. Even Porsche, a low-volume car manufacturer, is attracting the high-end legacy market with the Taycan.

At this point, it appears that Tesla’s mission is going well underway. With the market now open to the idea of electric vehicles, there is an excellent chance that EV adoption will only increase from this point on.

Big oil feels a change in the wind

Passenger cars are the No.1 source of demand for oil, and with the potential emergence of a transportation industry whose life and death does not rely on a gas pump, Big Oil could soon find itself on the defensive. Depending on how quickly the auto industry could shift entirely to sustainable transportation and how seriously governments handle issues like climate change, “peak oil” could happen a couple of decades or a few years from now. This could adversely affect investors in the oil industry, who might be at risk of losing their investments if peak oil happens faster than expected. JJ Kinahan, chief market strategist at TD Ameritrade, described this potential scenario in a statement to CNN. “Look at what happened to the coal industry. You have to keep that in the back of your mind and be vigilant. It can turn very, very quickly,” the strategist said.

Paul Sankey of Mizuho Securities previously mentioned that a “Tesla Effect” is starting to be felt in the oil markets. According to the analyst, the Tesla Effect is an increasingly prevalent concept today which states that while the 20th century was driven by oil, the 21st century will be driven by electricity. This, together with the growing movements against climate change today, does not bode well for the oil industry. Adam White, an equity strategist at SunTrust Advisory, stated that investors might not be looking at the oil market with optimism anymore. “A lot of damage has already been done. People are jaded towards the industry,” he said.

An analysis from Barclays points to the world’s reliance on oil peaking somewhere between 2030 and 2035, provided that countries keep to their low-carbon goals. The investment bank also noted that peak oil could happen as early as 2025 if more aggressive climate change initiatives are adopted on a wider scale. This all but makes investments in oil stocks very risky in the 2020s, and this risk gets amplified if electric vehicles become more mainstream. Sverre Alvik of research firm DNV GL described this concern. “By 2030, oil shareholders will feel the impact. Electric vehicles are likely to cause light vehicle oil demand to plunge by nearly 50% by 2040,” Alvik said.

Some of today’s prolific oil producers appear to be making the necessary preparations for peak oil’s inevitable decline. Amidst pressures from shareholders, BP, Royal Dutch Shell, and Total have expanded their operations into solar, wind, and electric charging, seemingly as a means to future-proof themselves. On the flipside, there are also big oil players that are ramping their activities. Earlier this month, financial titan Warren Buffet, who recently expressed his skepticism towards Elon Musk’s plan of introducing an insurance service for Tesla’s electric cars, committed $10 billion to Occidental Petroleum, one of the largest oil and gas exploration companies in the United States.

A Point of No Return

The auto industry is now at a point where a real transition towards electrification is happening. Tesla’s efforts over the years, from the original Roadster to the Model 3, have played a huge part in this transition. Tesla, as well as its CEO, Elon Musk, have awakened the public’s eye about the viability of electric cars, while showing the auto industry that there is a demand for good, well-designed EVs. Nevertheless, Tesla still has a long journey ahead of it, as the company ramps its activities in the energy storage sector. If Tesla Energy mobilizes and becomes as disruptive as the company’s electric car division, it would deal yet another blow to the oil industry.

At this point, it is pertinent for veteran automakers that have released their own electric cars to ensure that they do not stop. Legacy carmakers had long talked the talk when it came to electric vehicles, but today, it is time to walk the walk. German automaker Volkswagen could be a big player in this transition, as hinted at by the reception of its all-electric car, the ID.3. The ID.3 launch was successful, with Volkswagen getting 10,000 preorders for the vehicle in just 24 hours. The German carmaker should see this as writing on the wall: the demand for EVs is there.

The Volkswagen ID.3 is not as quick or sleek as a Tesla Model 3, nor does it last as long on the road between charges. But considering its price point and its badge, it does not have to be. Volkswagen states that the ID.3 will be priced below 40,000 euros ($45,000) in Germany, which should make it attainable for car buyers in the country.  If done right, the ID.3 could be the second coming of the Beetle, ultimately becoming a car that redeems the company from the stigma of the Dieselgate scandal. Thus, it would be a great shame if Volkswagen drops the ball on the ID.3.

Tesla will likely remain a divisive company for years to come; Elon Musk, even more so. Nevertheless, Tesla and what it stands for is slowly becoming an idea, one that connotes hope for something better and cleaner for the future. And if history’s victories and tragedies are any indication, once something becomes an idea, an intangible concept, it becomes impossible to kill.