Why Tesla Will Be Greener in the Future

Though Tesla's (NASDAQ: TSLA  ) electric vehicles may not be all that green today, that doesn't mean they won't be an excellent means for sustainable transport in the future. From the raw materials going into the Tesla's batteries all the way to the sources of energy used to charge the batteries, Tesla CEO Elon Musk's bet on electric vehicles as a green alternative to internal combustion engine vehicles is largely a bet on new innovations tomorrow. And the other company Musk leads, SolarCity (NASDAQ: SCTY  ) , may play a central role in this development.

Model S. Source: Tesla's official Twitter feed.

Battery production
All the way from raw materials to finished batteries, Tesla CEO Elon Musk claims to have a plan for a zero-emission process for battery production.

In Tesla's third-quarter earnings call Musk explained that it has acknowledged the fact that a "giga factory," or the world's largest factory for lithium-ion batteries, needs to be built. How else would Tesla ever produce an affordable car it could sell hundreds of thousands of per year?

But would the factory itself be green? Musk asserts that it will. Here are some tidbits he unveiled during the call:

  • There will be a lot of solar power.
  • It will have "essentially zero emissions."
  • Zero toxic elements will come out of the factory.
  • Battery recycling will be built in.
  • Just how big will the factory be? "[C]omparable to all lithium-ion production in the world in one factory."

Sounds pretty green, indeed. And considering Tesla has laid out a timeframe for the launch of its affordable car in 2016 or 2017, we won't have to wait long to see if Musk lives up to his word.

Solar power
Though the current sources of electricity in many areas of the world are far from green, typical sources like coal, natural gas, and nuclear plants won't always play such an important role as they do today in providing electricity. What will likely change the game? Solar power improvements.

Elon Musk, who is also the chairman of publicly traded SolarCity, recently shared an article that explains why he is bullish on solar power.

Summing up the article's most important arguments in two points...

  1. The annual energy potential from sunshine is about 25 times greater the total potential from coal reserves (and far greater than any other potential source).
  2. Prices for solar PV panels are falling rapidly. Prices dropped about 100 times over from 1977 to 2012 and 80% since 2008.

It would be naive for us to assume that solar technology for maximizing sunshine's potential energy will remain the same in the future. As solar charging improves and costs for the technology continue to fall, we may see exponential growth in solar PV capacity for years. Why not? The growth is already exponential. From 2007 to 2012, global solar PV power capacity grew 10 times over, according to the Renewables 2013 Global Status Report. 

The potential in solar is simply enormous. Steven Kotler, author of "Abundance", eloquently puts it into perspective:

The amount of solar energy that hits our atmosphere has been well established at 174 petawatts (1.740 x 10^17 watts), plus or minus 3.5 percent. Out of this total solar flux, approximately half reaches the Earth's surface. Since humanity currently consumes 16 terawatts annually (going by 2008 numbers), there's over five thousand times more solar energy falling on the planet's surface than we use in a year. Once again, it's not an issue of scarcity, it's an issue of accessibility.

Musk's big bet
The combination of new innovations in lithium-ion production and rapid improvements in solar charging innovations could very well make Tesla's vehicles far greener in the future than they are today. If solar power does improve by leaps and bounds in the coming years, will we look back at Musk's heavy investment into the two macro developments as well timed ventures in exploding industries? Possibly so.

This doesn't mean that both Tesla and SolarCity are automatically excellent low-risk investments. But accepting the fact that tomorrow will likely be far different from today will likely open up your mind to think differently about stocks that will be affected by solar power innovations in the future.

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Read/Post Comments (11) | 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 January 05, 2014, at 11:39 AM, AIRCare wrote:

    According to SolarCity's website Elon Musk is the Chairman, not the CEO of Solar City. See link below:

    http://www.solarcity.com/media-center/management-team.aspx

  • Report this Comment On January 05, 2014, at 12:13 PM, ArmyDaveNY wrote:

    This isn't a very accurate title. First, who cares about carbon? Carbon is the least effective of the so-called greenhouse gases. Additionally, the amount of man made carbon is infinitesimally small contrasted to natural sources. What makes batteries "unclean" is the mining process to get the raw materials and the waste from the manufacturing process. Additionally, the disposal of the batteries can be very unclean depending upon how it is done.

    Having said that, I am pretty sure that Mr. Musk will likely have one of the cleanest battery manufacturing plants around and very possibly will recycle a great amount of the old batteries.

  • Report this Comment On January 05, 2014, at 3:08 PM, ashaskevich wrote:

    I think the title is accurate. Green in that, money is green. It will be very profitable to install solar panels, and produce electric cars.

    Solar City may not be a company that I will invest in but, I do have money in Tesla Motors.

    Solar is cheaper than other forms of energy, like oil, gas, coal and there is plenty of solar around to use.

  • Report this Comment On January 05, 2014, at 6:35 PM, cupera1 wrote:

    Once they get the electric cars not to catch on fire on the road or charging at the house that will help a lot. Tesla will be a rich mans toy for quite some time. buying a 100k car that only goes 300 miles is not going to be a mass seller

  • Report this Comment On January 05, 2014, at 7:23 PM, toddsumner wrote:

    Until a cost-effective storage technology is developed, solar will continue to be a second rate generation source.

    Li-ion batteries will never ever be the solution for energy storage.

    Conserving energy through the adoption of more energy efficient homes, businesses, appliances and vehicles is the only sustainable solution to our energy concerns.

  • Report this Comment On January 06, 2014, at 12:06 AM, kirkydu wrote:

    toddsummer, you are wrong. Solar will grow about 30 fold the next decade as it takes a greater share of peak energy use during DAYLIGHT hours - when most energy is used.

  • Report this Comment On January 06, 2014, at 7:40 AM, weaponz wrote:

    @cupera1 - Kind of tough, gasoline car manufacturers could not prevent gasoline cars from catching on fire every 2-3 minutes even with 100 years and billions in research.

    Also, a Tesla Model S battery is already fairly green. Look up info on the panasonic Sominoe factory in Osaka. The offices there earned an S-class and factory earned A-class from the building environment efficiency agency. It also uses advanced technology to do 100 percent recycling of waste water from manufacturing process.

  • Report this Comment On January 06, 2014, at 11:36 AM, alcorenilth wrote:

    The science in this article is correct... but the engineering is grossly naive. With that said, Solar is going to get a lot bigger, and should eventually reach the point where it covers a large fraction need.

    We still need to find improvements in sources like Geothermal and/or Nuclear (possibly fusion) to provide stable "base load" capacity as well.

  • Report this Comment On January 06, 2014, at 12:32 PM, dlwatib wrote:

    Haven't we had enough nuclear disasters already?

  • Report this Comment On January 06, 2014, at 2:46 PM, nonqual wrote:

    Why no solar panels at Fremont nor any of the service centers? Except for one or two locations, no solar panels covering Super Charger parking spaces.

    There is no economical way yet developed to separate and reuse the NI, Co, and Al in the cathodes of depleted Li ion batteries. Until such a separation process is commercially viable, 1,000 lbs of batteries for personal transportation is a "green" fantasy of low information types.

    Buy the car (it's priced below costs); sell the shares (they're priced far above reality).

  • Report this Comment On January 06, 2014, at 11:23 PM, weaponz wrote:

    @dlwatib - There are safer nuclear reactors such as thorium. Even better thorium reactors can actually dispose of nuclear waste we have lying around.

    @nonqual - That is simply not true. Ni, Co and Al can be broken down profitably. Read up on umicore, they are one of Tesla's recycling partners.

    Also, there are quite a few superchargers with solar overhead, but Tesla at this point is prioritizing building out the network, solar overheads will come after. As for solar panels on top of Fermont or service centers. There is no point, simply put Tesla can just buy solar from SolarCity. Solar pays for itself in 5 years time, but there is no reason to waste capital when you already have solar deployed on top of people's houses that you can use.

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