Elon Musk: Demand for Tesla's home battery is 'crazy off the hook'

[Pitt Gorilla]

https://fortune.com/2015/05/06/elon-...-home-battery/

Demand for Tesla’s energy storage batteries are so high that the company’s Nevada gigafactory could dedicate all of its production to the home and utility products, CEO Elon Musk says.

Tesla CEO Elon Musk was his usual effusive self in describing demand for his company’s new Powerwall home batteries for storing home solar energy, unveiled last week at a splashy event outside Los Angeles. He called the 38,000 pre-orders “crazy off the hook” while acknowledging that his company’s production can’t keep up.

“There’s like no way we could possibly satisfy demand this year,” Musk told analysts Wednesday during its first-quarter earnings call. “We’re basically sold out through the middle of next year.”

Musk is making good on his promise to revolutionize the auto industry with his electric carmaking upstart. Now he has set his sights on another target: energy.

Musk’s long-term vision for Tesla Energy is bold—he expects global sales and to “fundamentally change the way the world uses energy.” But even he seemed surprised by interest in the energy storage products. The level of demand has been so large the executive team is investigating whether it should boost capacity for stationary storage battery packs at its so-called “gigafactory” currently under construction near Reno, Nev.

In addition to home batteries, Tesla has come up with a bigger battery for commercial use and utilities, called Powerpack. Customers have pre-ordered 2,500 of those. Musk cast the demand as a bit deceiving. He described the reservations as the equivalent of 25,000 packs because a typical utility or heavy industrial customer would require at least 10 of the packs.

Using a somewhat similar calculation, Tesla expects the average home customer to order 1.5 to 2 of its smaller Powerwall units. If that prediction is correct, that would mean orders for as many as 60,000 Powerwall home battery packs.

About one-third of the battery pack production capacity at the gigafactory has been reserved for energy storage. However, Musk said the company could increase that capacity by as much as 50% because of unexpectedly high demand.

“The sheer volume of demand is just staggering,” he said. “We could easily have the entire gigafactory just do storage.”

Even if Tesla does boost capacity, battery packs for the Model S and the highly anticipated Model X SUV are still the priority, Musk added.

Powerwall, a sleek suitcase-sized lithium-ion battery designed for homeowners to store energy, comes in 7 kilowatt-hour and 10 kWh sizes. Both units are meant to be combined with solar panels. The 10 kWh home unit is designed as a source of backup power, while 7 kWh-unit can be used daily to extend the environmental and cost benefits of solar after the sun has gone down.

The home energy battery, which comes with a 10-year warranty, is designed to be mounted on a wall. Tesla’s selling price to installers is $3,500 for 10 kWh and $3,000 for 7 kWh. The costs don’t include installation or the inverter that converts direct current power to alternating current for use in the home. Deliveries will begin this summer.

The Powerpack will be sold in 100 kWh units and can be scaled up into multi gigawatt-hour class. The Powerpacks are priced a $250 a kilowatt-hour.

Demand for Powerpack is high, despite the poor economics of its 7 kWh daily cycling unit. Tesla did not break out reservations for the 10 kWh and 7 kWh units.

“The economics in the U.S,. with rare exception, are more expensive than utilities,” Musk admitted. “If someone wants to do daily cycling off-grid, it’s going to be more expensive than being on-grid. That doesn’t mean people won’t buy it. There are people who want to go off-grid on principle, or they just want to be independent.”

However, the 7 kWh battery does make economic sense in certain markets overseas, particularly in Germany and Australia because of tariffs and the electricity-rate structures in those countries, said Tesla co-founder and Chief Technology Officer JB Straubel.

Also on Wednesday, Tesla Motors TSLA 1.18% reported that its first-quarter revenue grew nearly 52% to $939.9 million, over the same period last year. The company also reported that its losses tripled to $154 million in the quarter, or $1.22 per share.

[Pitt Gorilla]

Originally Posted by Baby Lee

Stifle Edith.

As surface distasteful as these taxes are. they aren't disincentives, and they aren't partisan. Solar tied to grid, just like electric automobiles, use infrastructure without consuming the resources that pay for said infrastructure.

Why would it have to involve the grid?

[Baby Lee]

Originally Posted by Pitt Gorilla

Why would it have to involve the grid?

Which 'it' are you talking about? The OP is about the Musk battery. Waaaaahhhhhat was referencing grid tied solar.

[morphius]

Saw this yesterday, thought it might be relevant:

Tesla's New Battery Doesn't Work That Well With Solar:

http://www.bloomberg.com/news/articl...ell-with-solar

But if its sole purpose is to provide backup power to a home, the juice it offers is but a sip. The model puts out just 2 kilowatts of continuous power, which could be pretty much maxed out by a single vacuum cleaner, hair drier, microwave oven or a clothes iron. The battery isn’t powerful enough to operate a pair of space heaters; an entire home facing a winter power outage would need much more. In sunnier climes, meanwhile, it provides just enough energy to run one or two small window A/C units.

[Iowanian]

Power storage is one of the very limiting factors for wind and solar, especially on the single user level.

The batteries working well would be a big win, and eventually the cost will come down.

[MIAdragon]

Who says "off the hook" anymore?

[DJ's left nut]

Originally Posted by Baby Lee

Right now, it's still a prestige investment, as the life of the battery is shorter than the time frame of ROI. But it's an interesting exploration of demand leveling.

Battery technology has been the choke point for virtually every alternative energy source we have for decades.

Wind power cannot be truly efficient right now because so much energy is lost through transfer to/from batteries that those wind turbines are really only effective when it's actually windy.

It Tesla can make a legitimate breakthrough in battery technology, it would be a game-changer. We have electric motors, etc... that are technologically well beyond the batteries we have to run them.

[Baby Lee]

Originally Posted by morphius

Saw this yesterday, thought it might be relevant:

Tesla's New Battery Doesn't Work That Well With Solar:

http://www.bloomberg.com/news/articl...ell-with-solar

The way I read it, it isn't so much that the battery 'doesn't work well' with solar. It's that they're not marketing batteries designed with discharge rates for off grid use, and it's still cheaper to forego batteries and sell solar power to the grid

This problem is exacerbated because the discharge capacity needed requires parallel units, only the first of which is price incentivized.

The batteries are following the same laws of physics and electromagnetics as always, Musk is just fabricating them optimized for solely outage backup applications.

[Saul Good]

Musk is a hell of a marketer/promoter. I'll grant him that much.

[Great Expectations]

Originally Posted by WhawhaWhat

The Republicans lead the charge on the other side. Taxing people because they went solar.

If there is a loss in revenue it will had to be made up somewhere. At least this is a flat tax of sorts.

[Rausch]

Originally Posted by Iowanian

Power storage is one of the very limiting factors for wind and solar, especially on the single user level.

The batteries working well would be a big win, and eventually the cost will come down.

Might be my own ignorance but it amazes me that data storage has increased more than thousands of times in the last 30 years but battery storage capacity is still creeping along...

[Baby Lee]

Originally Posted by Rausch

Might be my own ignorance but it amazes me that data storage has increased more than thousands of times in the last 30 years but battery storage capacity is still creeping along...

I've warned against these expectations for years. When you are dealing with light and electromagnetism, the sky is the limit due to the infinitesimal size of light waves, the lack of mass, and the incredible speed at which light and electrons travel.

When dealing with power plants or power storage, you are dealing with the physical limitations of materials with mass, with the force and inertia they carry with them.

[Hog's Gone Fishin]

If it could just jerk off a boar !

[Stewie]

I'm not sure what these customers think they're buying. You're not going to power a household with a battery bank like this and it's really expensive for what it is. It appears it's just a backup system and my $400 portable generator produces more amps than this system.

[kcfanXIII]

Musk is an extremely intelligent guy, with shitloads of money. Even with the limitations this battery has, I suspect within the next 10-15 years they will have overcome the hurdles facing them now. These are basically beta versions.

[Stewie]

Originally Posted by kcfanXIII

Musk is an extremely intelligent guy, with shitloads of money. Even with the limitations this battery has, I suspect within the next 10-15 years they will have overcome the hurdles facing them now. These are basically beta versions.

This is not a beta version. It's rehashed technology wrapped in a ribbon by Musk and people think it's an advancement. It's not. I feel bad for the people lining up for this because they'll be disappointed.