Sunday, May 12, 2013

Tesla Motors: Lots of buzz. Is it warranted?

Tesla Motors is a bright spot?amid high-profile, federally-funded electric car flops. Tesla Founder Musk has found a way to bring high-tech pizzazz to a 'green' car drawing comparisons to Steve Jobs and Apple.

By David J. Unger,?Correspondent / May 10, 2013

Tesla Motors CEO Elon Musk speaks at his company's factory in Fremont, Calif. Tesla is among perhaps only a handful of companies that have changed the way consumers think about alternative energy.

Noah Berger/Reuters/File

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Tesla Motors had a good week.

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Why It Matters

Energy: The transportation sector consumes 70 percent of the oil used in the US. EVs can held diminish that reliance.?

Environment: Depending on where their electricity comes from, EVs could reduce greenhouse gas emissions.

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The luxury electric carmaker posted its first profit late Wednesday. The next day, Tesla's Model S tied for Consumer Reports? highest testing score ever. Wall Street rejoiced, pushing shares of Tesla up 24 percent on the news.

Tesla Motors is a bright spot?amid high-profile, federally-funded electric car flops. CEO Elon Musk's innovative approach to carmaking suggests the energy industry can benefit from borrowing a page from the tech sector's playbook.

The two sectors have borne some resemblence of late. New computer software has changed the way we look for oil. Smart thermostats are saving on residential energy consumption. The lithium-ion batteries that have powered our consumer electronics for a decade, are beginning to transform the way we fuel our cars. ?

But if you're expecting the electrical grid to transform as quickly as the superconductor, you may be disappointed.?

"There?s no Moore?s Law in energy," Hal Harvey,?CEO of Energy Innovation: Policy and Technology LLC., a San Francisco-based?energy and environmental policy firm,?said in a telephone interview.

Mr. Harvey is referring to the principle that?the number of transistors on a computer chip will double approximately every two years. It's what has allowed for the exponential growth in information technology (IT).?

Energy, on the other hand, is largely governed by the laws of thermodynamics ? the physical transformation of energy from one form into another. That means upfront capital costs are higher, yield is lower, and technological turnover is much, much longer.

"I don't mean to say energy innovation isn't going to happen," Harvey said, "but I do mean to say that the characteristics of innovation in energy are fundamentally different than in IT.?

In Tesla Motors, Elon Musk appears to have found a sweet spot between the two. The glowingly reviewed Model S runs on advanced lithium-ion battery packs. The interior features a?17-inch touchscreen and two USB ports. Driving the car, according to Consumer Reports, is "like using an iPad."

For that reason and others, Tesla is compared to Apple, and Elon Musk to Steve Jobs.?

"[Musk's] doing it very much in the spirit of Silicon Valley," Roland Hwang,?transportation program director for the Natural Resource Defense Council, said in a telephone interview.?"He?s not an incrementalist; he?s looking for leapfrogging technologies."

There are drawbacks to those technologies. The limited range and high upfront cost of electric vehicles is still an obstacle for many people. That was evident in the dustup over a New York Times review that slammed the Model S's performance in cold weather conditions.?

Still, Tesla is among perhaps only a handful of companies that have changed the way consumers think about alternative energy.

"It?s transformed a popular vision of electric vehicles from 'eat your spinach' to 'eat my rubber,'" Mr. Hwang said. "That?s what Tesla has done."?

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/fFmMvqzXXQw/Tesla-Motors-Lots-of-buzz.-Is-it-warranted

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