The automobile industry has helped maintain global dependence on fossil fuels over renewable energy sources. One exception is Norwegian-owned Tesla Motors, which has a plant located in Fremont, California’s Silicon Valley and has gained notoriety with its luxury electric-powered vehicles. In 2013, it sold over 20,000 cars and has a presence in Canada, Europe, and China. As innovative as Tesla and others have tried to be, however, consumer cost and convenience remain significant challenges when the key elements of battery cost, longevity, and charging facilities are taken into account. 

Taking a step forward to support industry ancillary to the electric car business, Tesla will now pursue investments to double  global production of the lithium-ion batteries needed to power their luxury automobiles. The target is to manufacture batteries at a 30% lower cost within three years and 50% lower cost by 2020. The initiative includes increasing battery capacity, decreasing footprint, and reducing charging time.

On a broader scale, the energy industry has been plagued by a lack of cost-effective and operationally efficient solutions to store energy produced through renewable means, such as windmills and solar panels, at times of high production in order to provide that energy in peak demand periods. Power utilities companies – such as RWE in Essen, Germany, and France’s GDF SUEZ – have recently posted periodic financial losses, in great part due to their lack of response to renewable energy storage solutions. To make renewable energy practicable for consumers on a broad scale requires means to obtain the energy produced through devices like windmills and solar panels; it also requires a means to collect and save energy resources mined on sunny and windy days for use at a later time. On the occasions when there is not enough demand, power companies are forced to pay to deliver electricity to the grid because they cannot swiftly shut down their power stations.

Companies like RWE and GDF SUEZ have undertaken structural and public relations efforts to reinforce to investors and the public their commitment to expand energy production beyond fossil fuel sources. In January 2014, RWE renamed its renewable energy division in the UK from ‘RWE npower’ to ‘RWE Innogy UK’ to underline the fact that it is part of a single pan-European renewable energy company committed to renewable energy expertise and power plants of the RWE Group across Europe.[1] Hans Bunting, CEO of RWE Innogy GmbH, stated that the name will reinforce the identity of RWE Group’s renewable energy division. Mining the renewable energy sources and promoting the benefits over fossil fuels, however, may not be enough to respond to stakeholder pressure to supply cleaner and more sustainable energy that is economically viable. Salvaging the utilities companies’ investment in renewable energy will require a workable solution to store and control the use of the energy produced on demand. The challenge will become even greater as more consumers migrate off the grid or simply use it for backup. Investors in the utilities space should keep watch on Tesla’s storage solutions, as they could play a key role in helping to manage grid flexibility.