Would Half a Million Teslas Crash the Power Grid?

Photo credit: Tesla Motors.

Tesla Motors (NASDAQ: TSLA  ) has a bold goal of eventually delivering 500,000 vehicles per year. However, before it gets to that annual pace it first must produce that many cars in aggregate. Last week I looked at what the impact of half a million Teslas would be on our nation's gasoline consumption. This week, let's consider the impact of adding half a million Teslas to our nation's electrical infrastructure.

The goal of this little exercise is to dream along with Tesla, while also considering the consequences, if any, and benefits of that dream. Just to summarize its impact on our nation's gasoline consumption, to replace a half-million gas-guzzlers with a Tesla, our nation would cut out one full day of gasoline demand. That's not bad, but given our increased export capacity and voracious demand overseas, that gas would find another home real soon.

That's not to say Tesla won't have an impact on the marketplace, but let's look at where that impact will lie. Looking at the numbers, according to Fueleconomy.gov, the average Tesla Model S has an energy impact score that equates to using 0.2 barrels of oil per year. For perspective, a Ford (NYSE: F  ) Fusion has an energy impact score of 11.8 barrels of oil per year. The point being, Tesla will have an impact even if doesn't directly consume oil or it frees up that oil for other uses. That's why it's important to consider the cost of the electric that's generated to "fuel" the Model S.

The concern is that we could be replacing pain at the pump with pain at the meter if, as some have suggested, our country would need to build the equivalent of 20 to 30 new nuclear power plants to recharge all of these Teslas, let alone the rest of the EVs hitting the marketplace. Worse yet, we could lose the benefit of all those zero-emission Teslas if the nation turned back to coal power to supercharge the growth of EVs. While those are legitimate concerns, the truth of the matter is actually pretty shocking.

Our nation's electrical infrastructure is vastly underutilized. It is designed to meet peak demand and therefore runs at full capacity for only about 5% of the year. The rest of the time it could generate enough power to supply the energy requirements of 73% of the nation's cars, pickup trucks, vans and SUVs, according to a 2007 study by the Federal Energy Regulatory Commission (click here to review the findings -- opens a PDF). That's upwards of 200 million vehicles, meaning we could conceivably displace 6.5 million barrels of oil equivalent per day, or more than half of our nation's oil imports.

While that study was considering the impact of plug-in hybrids, there is clearly enough room for EVs to enter the market without totally disrupting it. That's why it's also fairly safe to say that plugging in the first half-million Teslas won't crash our power grid, in fact, we would actually be using energy that might have otherwise been lost. That being said, there is clearly the need to upgrade our ancient system, as well as adding to our peak capacity, but let's just say we won't be blaming Tesla if the grid goes down. 

This also means there's more than enough room for additional plug-in hybrids or EVs to enter the market from competitors such as Ford, which already has a Focus EV as well as plug-in versions of its C-Max and Fusion to go along with many of its gas-sipping models. The bottom line here is that the electric-vehicle revolution is still in its early stages, and while disruptive in once sense of the word, EVs are not a total disruption. That makes it a great time for investors to put EVS on their radar.

If there's one problem. it's that electric isn't yet to the point where it can provide for all of our transportation needs. That's why we as a nation need to pursue using all of our clean resources to kick our addiction to dirty Middle East oil. What you might not know is that there is this little-known company that holds the key to the explosive power of the coming "no choice fuel revolution." To learn more about this exciting opportunity you are invited to check out  an exclusive report from The Motley Fool. Click here for the full story!


Read/Post Comments (14) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 25, 2013, at 3:22 PM, AlaaSadek wrote:

    They charge from the sun. It is granted that the electricty has to go through the network which is the grid but to go as far as crashing it is too much. And even if it did the it would be a fantastic oppertunity to provide work for all these unemployed to improve the infrastructure of the grid. Having said that I am sure you know that you have a Large country and for half a million or even a million 85kw cars will translat into 85 GiGA wat which is nothing. Most networks in the US and the EU can easily are are made to handel TERA wats.

  • Report this Comment On August 25, 2013, at 4:31 PM, agsb2 wrote:

    Yes, they might crash the grid, but produces a lot of pollution. The power doesn't come from thin air to charge a tesla, something must make it and the choice fuel is natural gas which is clean except when it comes to CO2 produced.. Coal produces much pollution such as oxides of Nitrogen, Oxides of Sulphur, radioactive particulates in the burning of coal. Yes, an electric car produces pollution at the source of where electricity is produced. Wind energy produces a great many dead birds & noise pollution. So Nothing is pollution free.

  • Report this Comment On August 25, 2013, at 5:04 PM, CrazyDocAl wrote:

    Since that goal is at least a decade away and with the development in other forms of energy it's likely we will never find out. How about we see if Tesla can sell 20k cars this year before we worry about a pie in the sky goal.

  • Report this Comment On August 25, 2013, at 5:28 PM, Cody700 wrote:

    Is anyone else tired of reading about Tesla??????????? This is clearly a media driven faux hype of the highest degree. Tesla is NOT in any way, shape, or form EVER going to make even a scratch in sales against the rest of the established automobile manufacturers. NOT EVER. With that said, the point about what electric cars would do to the power grid actually has merit. Tree huggers love EV's and say the love the environment, but they havent taken into consideration how all of these cars would be charged, and what it would do to the environment having all of the additional power being generated. I doubt that even in the next 100 years if EV's are going to be viable for the masses.

  • Report this Comment On August 25, 2013, at 5:29 PM, weaponz wrote:

    The answer is no, our current grid can support millions of EVs without any added power sources. That is because most EV charging will be done at night when most of the electricity is wasted anyways.

    @agsb2 - vertical wind turbines don't cause noise and no dead birds/bats either.

  • Report this Comment On August 25, 2013, at 5:29 PM, autoinsider wrote:

    EVs are a diversion, a distraction. Nat gas is the next BIG thing very few people can see the forest for the trees.

  • Report this Comment On August 25, 2013, at 5:40 PM, tigerade wrote:

    Sure, the electrical grid could support millions of Tesla's. But why do that? Put some solar on your roof and charge with your own power - the sun.

  • Report this Comment On August 25, 2013, at 5:42 PM, weaponz wrote:

    Just wanted to add that the future of power generation will probably be cheap local solar, tidal and thorium reactors.

    @autoinsider - CNG only works for 18 wheel trucks. CNG is inferior to EVs in pretty much almost every single way for cars. If you took the same NG and burned it in a powerplant and used it to power an EV it would be more efficient then an CNG car.

  • Report this Comment On August 25, 2013, at 8:32 PM, workingstif wrote:

    Crash the grid?Chicken little response no way that will happen as others have commented the reasons why.Another big oil hanger on who tries to make Tesla cars seem unAmerican .

  • Report this Comment On August 25, 2013, at 10:18 PM, singaporejames wrote:

    20 to 30 Nuclear power plants to charge 500,000 cars. Why do you even write an article if you have no clue about the subject matter. Do you understand how the charging process works? Do you think that all Tesla owners are going to synchronize their charging times? Do you think that all will be charging their Teslas during peak hours? Are you a moron?(Rhetorical question).

    Are you aware that as green energy and self sufficient consumers grow, the amount of energy that they put back on the grid will increase as well? Are you aware that Tesla are also looking into ways of making charging station self sufficient with solar and wind energy.

    Are you really just dreaming this stuff up or do you really expect anyone to believe that you did some actual research before selling this crappy article to folk who obviously have no fact check department...

  • Report this Comment On August 25, 2013, at 10:27 PM, singaporejames wrote:

    Oh and another thing tying everything to Oil use is absurd....just like tying the dollar to oil... There is so much energy being produced by other than Oil means, be it tidal, hydro electric, solar, wind, Natural Gas, and Nuclear so why not think that all EVs are charged by the power that is produced using these means, your article is so short sighted, flawed, and really basically a waste in electricity....oh way to go...because of the time and energy I have wasted here on this...well that could have went into my Tesla....

  • Report this Comment On August 26, 2013, at 12:58 AM, CausalNexus wrote:

    Cody700, your post is quite definitive. You must have an amazing crystal ball. Regarding your comment "Tree huggers love EV's and say the love the environment, but they havent taken into consideration how all of these cars would be charged." -- 2 minutes of research would have found you that Tesla's plans include covering charging stations in sunny locales with solar canopies as part of their commitment to the environment. Better get yourself a new crystal ball.

  • Report this Comment On August 26, 2013, at 12:57 PM, FoolinSD wrote:

    agsb2 - You are comparing apples with oranges. The advantage of using electricity is economy of size. I hear that there are better filters at powerplants that even modern coal plants are cleaner than the equivalent amount of modern cars burning gas. Hey Mr DiLallo maybe you can write an article with some #s to back that up?

  • Report this Comment On August 28, 2013, at 5:30 PM, RussellL wrote:

    "...our country would need to build the equivalent of 20 to 30 new nuclear power plants to recharge all of these Teslas, let alone the rest of the EVs hitting the marketplace."

    Build more solar.

    Since this is an investing site, buy solar stocks like SCTY, FSLR, SPWR, CSIQ, SOL,...

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