Sustainability is important

Yesterday, when the new Tesla Model 3 was unveiled, an old idea about a sustainable energy company came back to me. I remember when I was young; I wanted to be in the sustainable energy business. I wanted to harvest the power of the river and turn it into electricity for the city that I lived in. When I was a bit older, I knew that we could also harvest the same power from the sun.

Harvesting the sun is better because there is less harm to the ecosystem. With that power, I also wanted to create fully electric public transportation for the people in the rural areas to commute to the city. Above all, I was fascinated by the fact that we can harvest endless power from nature to improve our lives.

Now that I am 26, it turns out that things are not that easy. Reality teaches me that for any business idea to work, there needs to be an economy behind for it to operate. Often time, that economy contradicts with the ideology of the original business. I don’t think Tesla is an exception. So I wanted to understand if Tesla really is a company that pushes for sustainable energy.

Is Tesla using sustainable energy?

Well, Tesla cars are 100% electric. That, we all know, but I don’t think all electricity is created equal. Some electricity is created from solar energy and most is created using fossil fuel. At least, Tesla cars don’t use fossil fuel.

I think there are several aspects that I need to examine to answer this question. First, what kind of electricity is sustainable energy? And second, is the infrastructure to support the level of Tesla’s electricity consumption deemed sustainable?

Just a disclaimer before I go into detail. I don’t have a Tesla car but I would love to have one. Though, I don’t think I will ever have one. I am not a proponent or opponent of any party or organization. I am just a random person on the Internet with a personal view.

Elon Musk himself has talked about this topic in a blog post here. I would recommend you to read it if you haven’t already.

Sustainable energy sources

Solar power is one of the most sustainable energy sources available today. Perhaps, nuclear energy is better but the public doesn’t like nuclear and it’s an entirely different topic. There is also hydroelectricity, wind power, tidal power and a few more sources. They are generally called clean energy or renewable energy sources.

However, the biggest source of electricity in the world comes from burning fossil fuel. Using fossil fuel to produce power is still the cheapest way to make electricity. So unless most Tesla customers are paying a higher price to use clean energy, the company’s cars are not making much of a difference in terms of burning less fossil fuel.

Musk also has admitted this in his blog post. Though, he did bring up a good comparison of electric cars consuming indirect fossil fuels via the power grid and the normal cars that burn gasoline. The conclusion is electric cars will produce less C02 than the regular combustion engine ones.

Another good argument that Musk has mentioned is that if you buy a Tesla car as well as solar panels and you only drive less than says 50 miles a day, you could become energy positive. Meaning you consume less power than you actually produce via your solar panels.

While all of his arguments are very compelling, I think they miss a very important factor, which is the not-so-cheap-economy behind buying and having renewable energy. The sad fact is that solar-based electricity is more expensive than using fossil fuel ones and Ain’t Nobody Got Money for more expensive utility.

The infrastructure for Tesla cars

Tesla cars use Lithium-ion batteries and they use a ton of them. The battery is not cheap as well. The cost of the battery is falling every year but it is nowhere near the price/energy density ratio needed for it to be competitive with gasoline. One thing I know about batteries is that they are big, heavy, bulky and ugly. They are usually expensive, their performance degrades over time and they are difficult to be recycled.

Tesla knows this and it is doing everything to make the battery better. It is building the Gigafactory just for mass-producing batteries and driving down the cost. It is making the battery less ugly by designing the sleek Powerwall product.

Tesla is betting its future on the battery, a future where battery could be the source of not-so-clean-energy. While the energy stored in a battery could come from a sustainable energy source, producing the battery itself isn’t necessarily clean. Lithium is a natural material like coal and it needs to be mined. Mining is one of the worse ways to destroy our environment.

Mining destroys the forest, the ecosystem and the community closed to it. Furthermore, the batteries don’t just need lithium; they need other heavy metal such as copper and aluminum. Processing these heavy metals take a lot of energy, chemicals and water as well.

Hell, we don’t even know if we have enough lithium in the world for us to mine to guarantee that future. One calculation here has shown that adding up all the currently known lithium sources in the world may not be enough to ascertain a future of all fully electric cars. Perhaps SpaceX can help Tesla to find another planet with more lithium to mine.

On top of that, Tesla is building a network of charging stations across the globe. It is doing so much it is burning more than $1 billion dollars in cash a year while the company is still not making any money. I am no economist but that pretty much tells me that at one point the company will have zero dollars to spend.

The latest Model 3 is one of the hopes for the company to be profitable. I truly hope that the Model 3 will bring profitability to Tesla. If it isn’t, I don’t think Tesla will ever be a sustainable business. When the business can no longer sustain a positive cash flow, the original intent of pushing for clean energy will slip away as well. You have to think about bread and butter before you could care for the environment. Currently, the public doesn’t believe that and it explains why Tesla’s stock is still high.

A future without with Tesla?

Honestly, I don’t want a future without Tesla. It is such an innovative, forward-thinking company. It is the very idea of a company I wanted to build when I was young. I don’t want to see it is not succeeding. If Tesla ever fails, though, I think a company should pursue producing a very efficient combustion engine car. At least, producing a very impressive hybrid beast with a 100-MPG rating.

I don’t see a future where batteries could be packed into a rocket engine to fly to space. Why is Tesla betting so much on a technology that doesn’t have that much potential? I think we need several more jumps in battery technology breakthroughs in order for it to be viable for the future of mankind. I would image the battery of the future to be as small as a car seat while delivering enough juice to travel for weeks. The battery has to be light, safe, easy to produce and to handle. Or at least, it must have the potential to do so.

So far, the future seems a bit gloomy to me. There is so much more to talk about and I believe I just have just scratched the surface of a tremendously difficult problem.

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