Tesla Motors Inc (NASDAQ: TSLA) has invested $5 billion to build a battery factory in Nevada. The facility is expected to create 6500 new jobs, produce 50 gigawatts of battery storage and provide power to 500 000 electric cars per year.
Tesla Motors Inc (NASDAQ: TSLA) is working with SolarCity Corp (NASDAQ:SCTY) on the new project. It is expected that the project will make electric cars more affordable. In addition, the battery packs being manufactured could be installed in homes reducing consumer’s dependence of electricity from the grid.
Tesla Motors Inc (NASDAQ: TSLA) founder Elon Musk believes they can make batteries small enough to fit in an average home. These can then are connected to rooftop solar panels and provide power to homes enough for a whole day.
This is good news to anyone burdened by the cost of fueling a car and the bills from electricity providers. Plus, this will promote the reduction of carbon emission as the calls for renewable energy intensify.
But in the long term, this would prove detrimental to their survival of utility companies. If customers adopt the solar energies and batteries from Tesla Motors Inc (NASDAQ: TSLA), then they will rely less on utility companies for power.
In Australia for example, consumers are abandoning the traditional system in favor of solar power. Predictions indicate that in 10 years, 75% to 90% of homes could be powered by solar energy in that country.
Musk and SolarCity Corp (NASDAQ:SCTY) CEO Lyndon Rive jointly said this does not spell the end of the utility companies. Their prediction is that 65% of energy will come from solar power and the remainder will be provided by the utility companies.
“The electric grid will be just as important in the years to come because the grid is becoming the platform that makes it possible for people to plug in solar panels, batteries and charging stations. Having a solar panel that isn’t connected to the grid is like having a computer that’s not connected to the Internet.”
This article has been written by Amna El Tawil.