“The Missing Piece” was how Tesla Motors teased the market on invites to a new product line being unveiled today. The below graphic was sent out to analysts, journalists and industry participants for the launch event at 8pm in California.
Confirmed by CEO Elon Musk via Twitter on 30 March 2015, the “major new Tesla product line” will not be a car. In what is likely to be one of the industry’s worst kept secrets, Tesla Motors is set to announce its first residential scale battery, powered by Gigafactory lithium-ion cells. In fact according to Benchmark Mineral Intelligence estimations, Tesla could produce enough lithium-ion batteries by 2020 to power 3.5m homes.
Not much is known about Tesla’s first battery that can power your home besides the sleek white outline on the graphic below. But it is a smart move designed not only as a fail-safe for slow EV adoption, but also to create a new market and fulfil Tesla’s grand Gigafactory ambitions.
Tesla Teaser: invite sent out for today’s new product launch
If the battery pack that Tesla designed for Solar City is anything to go by (below), we can expect a lithium-ion battery that uses a nickel-cobalt-aluminium cathode and a graphite anode. The battery is expected to be roughly the size of a briefcase with a capacity of 10kWh, somewhat smaller than the 60kWh and 85kWh batteries Tesla uses in the Model S, but without the need to shift a two tonne car.
The Guardian reported that the batteries could be leased from one of Musk’s other companies, Solar City, for $1,500 with further payments of $15/month to have solar power on tap – a much more manageable financial outlay for the individual consumer than the total cost of the unit, which is expected to be in excess of $10,000. We will know more by the end of the day.
Tesla home battery blueprint designed for Solar City
Perhaps the most intriguing aspect of Tesla’s push into the battery space is it is yet to produce a single battery but the most talked about company by some distance. The Gigafactory, which will manufacture Panasonic designed cells, is on track for a start up in late 2015 with satellite images showing its latest progress, but Tesla will still be reliant on imported batteries from Japan for at least the next two years.
It is some achievement by Elon Musk to generate such excitement about what can be a mundane subject. An Inc article yesterday likened Musk’s showmanship to that of Steve Jobs, Apple’s great innovator, disruptor and market creator, but to generate such buzz for a residential battery is remarkable compared with the easier task of marketing a smartphone or EV.
It is further proof that Tesla has momentum on its side to create a shift in the way we consume batteries.
Benchmark has long said that the story is not about EVs but about batteries which can be used in multiple applications to power every part of our daily lives.
We already accept charging our smartphone, laptop, tablet, and power tools, so it is logical to assume a new generation of under 40-year olds will not be averse to charging their car or plugging their home into a battery. If the costs are competitive and the products are easily attainable, major barriers to entry have been overcome.
By design, Tesla Motors has now become the world’s first fully integrated and diversified battery company. Today’s announcement will ensure that the Tesla discussion is now not just about EVs but also about powering homes and, eventually, commercial buildings. It also eases the pressure on selling enough EVs to satisfy a Gigafactory running at capacity.
The next hurdle, however, remains the biggest: to produce the world’s lowest cost lithium-ion batteries.