The long-promised electric vehicle (EV) revolution is now as unstoppable as the renewables revolution.
Yet the man most responsible for this new reality — Tesla CEO Elon Musk, the Moses of EVs — may, like Moses, ultimately not enter the “Promised Land” himself. That is to say, while Tesla spurred the domestic and global auto industry to bet heavily on EVs, Tesla’s own success is far from certain.
Indeed, in recent weeks and months, Musk has been behaving erratically and Tesla has been flailing.
The company has been missing key production targets for its mass-market Model 3 for the past year, Moody’s downgraded Tesla’s credit status, and Musk told CBS this spring, “I’m definitely under stress,” later adding, “so if I seem like I’m not under stress then I’m gonna be clear. I’m definitely under stress.”
Another big confidence-shattering moment for Tesla came Friday, when Musk announced that he would not be taking the company public — just 17 days after he created a financial firestorm by tweeting on August 7, “Am considering taking Tesla private at $420 [a share]. Funding secured.”
At the time, Tesla was trading around $340 a share, it jumped up to $380, and now, as of midday Monday, it is below $320 a share — going back to a price the stock was first at in May 2017.
“Tesla investors must realize that they have a panicky, erratic, possibly self-destructive CEO at the helm,” Yale Management professor Jeffrey Sonnenfeld told the New York Times Friday. “No CEO is ever this confused and confusing.”
So the future success of Tesla as a mass-market EV manufacturer is far from certain.
But while some in the media are quick to dismiss Musk and Tesla as a “minor subplot” in the fight against climate change, the reality is that both the EV and battery revolution owe an immense debt to Musk.
“Before 2010, there was effectively no demand for electric vehicles,” as the Department of Energy (DOE) explained in its history of electric vehicles. But “by the end of 2014, more than 700,000 total plug-in vehicles had been sold worldwide (plug-in hybrids and pure battery electrics).”
What caused the turnaround? The DOE explains that a crucial “event that helped reshape electric vehicles was the announcement in 2006 that a small Silicon Valley startup,” would start making an electric sports car with a 200-mile range.
“Tesla’s announcement and subsequent success spurred many big automakers to accelerate work on their own electric vehicles,” DOE notes.
As Forbes put it two years ago, “Tesla’s Innovations Are Transforming The Auto Industry.” Business Insider made the same point earlier this year.
This transformation has led to explosive growth in EV sales globally as well as massive investments by European and Chinese companies.
At the current rate of growth, plug-in electric vehicles would be half the new car market in 2027, EVvolumes.com points out. Bloomberg New Energy Finance thinks that won’t happen until the 2030s.
But either way, the EV revolution is so irreversible that many major countries have already announced plans to phase out fossil fuel-burning cars over the next decade or two, including the UK, France, Norway, India, and even China.
Why is all this a game-changer for climate change? Several reasons.
First, the transportation sector has always been the greatest challenge for reducing carbon pollution. There are countless carbon-free sources of new electric power — like solar, wind, and nuclear, along with improvements to efficiency. Renewables in particular have dropped so sharply in price that they are now the cheapest new source of power in many places across the country and around the world.
But until the advent of practical and affordable electric cars, it wasn’t clear how the transportation sector would decarbonize. Now it is. We now know that over the next decade or two, electricity will become the dominant alternative fuel — and because of the renewables revolution, it will be increasingly cleaner and cleaner.
Second, the EV revolution has been enabled by a rapid drop in the price of batteries — a price drop that has, in turn, been sped up by the rapidly accelerating sales of EVs.
This battery revolution, as a result, is in the process of helping to solve a key barrier to deeper penetration of renewables: providing a cheap way to store power when the sun isn’t shining or the wind isn’t blowing. The battery revolution has occurred so quickly that in places llike Colorado, building new renewable power plus battery storage is now cheaper than running old coal plants.
Moreover, the batteries in the electric cars themselves can potentially be used to help store variable power sources like wind and solar — and thus further enable the penetration of renewables.
So while the future of Tesla remains uncertain, the triple revolutions of EVs, batteries, and renewables have become mutually irreversible, which is a game changer for climate change. And Elon Musk, as much as any one single person in the world, deserves a great deal of the credit.