Why Tesla Will Be Greener in the Future

Tesla's electric vehicles may not be an entirely green solution today, but could that change in the future?

Jan 5, 2014 at 8:59AM

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 Twitter

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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Fool contributor Daniel Sparks owns shares of SolarCity and Tesla Motors. The Motley Fool recommends SolarCity and Tesla Motors. The Motley Fool owns shares of SolarCity and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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