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The electric car — from Thomas Edison to Grandma Duck

People tend to think that Teslas and the Nissan Leaf are new developments, but in fact the electric car has a history stretching back to the 19th century.

The first electric car was built in 1884 by Thomas Parker, the man responsible for designing the London Underground, plus various overhead tramways in Liverpool and Birmingham, all running on electricity. Parker powered his independent vehicle with rechargeable batteries of his own design.

Soon variations on the EV began to appear across Europe and America. Gasoline engines were still loud and dirty and required a hand crank to get started. Steam cars were regarded as much cleaner and easier to use. Although they took a little while to get warmed up, they did not require long recharging periods, as did the electrics.

As a result, in the year 1900, 40 percent of American cars on the road were powered by steam, 38 percent by electricity and the remaining 22 percent by the infant gasoline engine. Henry Ford, then an employee at Detroit Edison, was as interested in electric cars as the internal combustion engine. In 1896 he was driving an electric “quadricycle” around Detroit. He met Edison, who was his employer, and showed him his plans for an internal combustion engine. Edison encouraged him to go ahead, even though he had his own plans for an electric vehicle.

Ford founded his own company in 1903 and introduced two revolutionary changes: the electric starter motor and the assembly line. Soon the Ford Model T, known as the Tin Lizzy, was going through the production process in 90 minutes. With the arm-twisting crank no longer necessary, the internal combustion engine took off, quickly replacing both the steamer and the electric.

Meanwhile, Edison had not lost interest in the electric car. He replaced the lead-acid battery with a more efficient nickel-iron version and announced the conversion of four touring cars from gasoline to electricity. He also wrote in favor of the technology:

Electricity is the thing. There are no whirring and grinding gears with their numerous levers to confuse. There is not that almost terrifying uncertain throb and whirr of the powerful combustion engine. There is no water-circulating system to get out of order — no dangerous and evil-smelling gasoline and no noise.

To this he could have added “no polluting exhaust and no carbon emissions,” but the advantages he mentions still remain today.

Nevertheless, Americans learned to live with the roar of the ICE and the smell of gasoline. Ford’s interest in electricity did not die, however, and as late as 1914 he and Edison were rumored to be working together on an electric car. It was reported that the car would sell for somewhere between $500 and $750 and have a range of 100 miles. Edison wrote:

Mr. Henry Ford is making plans for the tools, special machinery, factory buildings and equipment for the production of this new electric. There is so much special work to be done that no date can be fixed now as to when the new electric can be put on the market. But Mr. Ford is working steadily on the details, and he knows his business so it will not be long.

I believe that ultimately the electric motor will be universally used for trucking in all large cities, and that the electric automobile will be the family carriage of the future. All trucking must come to electricity. I am convinced that it will not be long before all the trucking in New York City will be electric.

Ford even bought interest in a power plant at Niagara Falls to provide some of the electricity. But Edison’s nickel-iron battery proved to have internal resistance and was not powerful enough to propel the vehicle. So the lead-iron battery was re-substituted without Ford’s knowledge. When it proved to be too heavy to be carried by the vehicle, Ford was furious, and the project was abandoned.

So the electric car gradually faded from view. By the 1950s, the only person in America still driving an electric was Walt Disney’s Grandma Duck, who as the grandmother of Donald was a symbol of octogenarian irrelevancy. But the oil crisis of the 1970s changed all that. Once again there was widespread interest in finding a substitute for gasoline and foreign oil.

California got the ball rolling with a mandate that the car companies produce a zero-emissions vehicle or be banned from selling in the state. One result was GM’s EV1, an electric vehicle made in the late 1990s that won praise in the industry but was probably ahead of its time. Vijay Vaitheeswaran, energy writer for The Economist, described his experience when he rented an EV1 during a visit to California:

The vehicle proved to have a much shorter range than I thought it would – closer to 50 miles than a 100. The fact that I sped along at 80 mph in those empty HOV lanes might have drained the battery faster, but only certain highways had that lane; more often, I was crawling along in traffic like everyone else. And most of the time, I was going nowhere at all, since my vehicle kept running out of power. Charging proved the biggest nightmare. There were plenty of chargers around, but some were of the wrong sort; others were locked or nonfunctional. And rather than the “pretty quick” recharge, my useless battery took more than five hours for a full charge. As a result, my entire visit turned into a fiasco of delayed or missed appointments, apologetic cell-phone calls, and panicky exits from the highway to obscure malls and commuter-rail stations in search of a charger.

Most EV1’s ended up in the shredding machines. The story was then told in a bizarre documentary, “Who Killed the Electric Car?”, which found four people who said they would have liked to buy one and attributed the whole failure to a conspiracy by the oil companies.

But the ice was broken, and in 2006 PayPal founder Elon Musk introduced the Tesla, a high-end vehicle that he said would redefine the automobile industry. The $103,000 Tesla Model S P85D was named the “best car ever” by Consumer Reports last week (“on a scale of zero to 100, a 103”). Musk is currently planning to reach the average car buyer with the Model 3 that will sell for $35,000. Nissan’s Leaf, an urban run-around, has racked up 170,000 in sales worldwide.

The obstacles remain the same as those Thomas Edison and Henry Ford faced: limited driving range, long charging time, the weight of the battery and a scarcity of recharging stations. But Tesla and Nissan are working hard to overcome them.

So will the electric vehicle once again be consigned to the ranks of those novelties that never quite worked out? Or will it fulfill the long-lost dreams of Thomas Edison and Henry Ford as a legitimate alternative to the internal combustion engine? We’ll know in about two years when the Model 3 hits the market.

Is Tesla really all that disruptive?

Elon Musk’s dream of revolutionizing the auto industry seemed to lose some of its luster last week as the fledgling electric car company ran into a few roadblocks in getting its new models into consumer hands.

The $35,000 Model X is scheduled to be leaking out to a few early customers late this year. Then full-scale production will begin in 2016. But already there is talk of delays and missed deadlines, so there might be an asterisk attached to those numbers soon.

The ultimate goal is selling 50,000 Model X’s by 2017, which still seems way over the horizon. A lot of those sales were supposed to come from China, and that’s developing into a problem. Musk was in China last week talking things over with Zhao Kuiming, head of Tesla’s China sales division, but Musk has already decided to “reboot.” It appears that Chinese buyers are still spooked by the lack of recharging stations, even though there have been a few grand openings around Beijing. Tesla was hoping to sell between 4,000 and 8,000 models in China in 2015, but only 120 cars were sold in January. Musk has cut the China staff from 600 to 420 and is recalculating just what can be expected from the Middle Kingdom. The tastes of the few Chinese millionaires who could be counted on to purchase the Tesla as a status symbol aren’t going to get him very far.

All this has spooked investors as well. They’ve driven the price of Tesla stock down nearly 20 percent since the start of the year. Once the highest flyer on the market, Tesla peaked at $293 a share last September, but it’s been a long descent ever since. Prices lingered around $180 per share last week. Even then, Tesla is trading at 232 times its expected earnings for 2015. The average stock on the NASDAQ, where it trades, is 21 times earnings. All this has lifted the short interest on Tesla stock to 27 percent of floating shares. The average on the NASDAQ, once again, is only 5 percent.

Nevertheless, all this could turn around quickly. Tesla already has 20,000 pre-orders on the Model X, and there is every reason to think its release could revolutionize the industry, much as Musk says. As it is emerging, the Tesla is going to be a device much more attuned to electronics and Silicon Valley as it is to Detroit and the auto industry. Musk is already introducing over-the-air (OTA) updates of the car’s software in a model, much more like an iPad than a Ford Focus. All those features you see advertised by the major automakers — rearview cameras, automatic emergency braking — will be standard in the Tesla. Musk is already talking about an automatic driving feature that will allow drivers to guide the car hands-free on Interstate highways. Of course, there are lots of state regulations that will have to be satisfied before this feature can go into effect. California, Nevada, Michigan, Florida and Washington, D.C., already have laws allowing driverless vehicles driving, but it’s unclear how Tesla’s system will be judged under these statutes.

Also decided at the state level is the question of whether Tesla can sell directly to customers or must work through established car dealerships. These laws are generally put into effect at the behest of local dealers to prevent the major auto companies from setting up their own shops. But Tesla has run afoul of the law in many states. The company just won a major victory when New Jersey Gov. Chris Christie came down in favor of Tesla. Georgia has also opened its doors to direct sales at five stores. But West Virginia has gone in the opposite direction, banning sales of Tesla altogether. There probably aren’t that many potential Tesla customers in West Virginia anyway.

Perhaps the unkindest cut came from Wall Street Journal columnist Holman Jenkins, who wrote a piece titled “Tesla: Just Another Car Company.” If you wanted to insult Elon Musk, you could hardly do better. “Elon Musk has proved that a market exists for electric cars, despite their many inconveniences, especially if they come wrapped in taxpayer subsidies,” Jenkins wrote. “But he hasn’t proved he can make a profit.”

Jenkins sees the Tesla operating in a niche market, in which a small percentage of customers are willing to ignore the problems in order to be “green.” Once this niche is filled, however, the market will thin out quickly. “Uber is disruptive,” he writes. “Tesla isn’t. Tesla is disruptive mostly of a driver’s confidence that he’s going to reach his destination without needing a tow.”

Yet this perspective is probably too negative of Tesla, and electric cars in general. There are people whose driving needs it fits perfectly. “I own a Tesla. It is beyond spectacular,” wrote one of the commenters to Jenkins’ piece. “The car has Di Minimus maintenance as there is nothing to break.” “That is why I bought a Tesla,” says another. “At 270 miles to start with, range anxiety is not my problem, yet. I rarely drive over 100 miles in any given day, and if I needed to, my Chevy Tahoe is still in the garage.” I have friends in Baltimore who bought a Nissan Leaf as a second car to tool around the city and love it.

So Tesla may just be filling a niche, but it is still a sizable one. Infrastructures can change a lot faster than we anticipate, especially where there is a demand for it. Tesla’s stock may be overvalued and due for another nosedive. But the company is still making big changes in the way we power our cars.

10 people who turned anger into solutions for high gas prices

So we’ve heard from Americans who say high gas prices have disrupted their lives and their work. Let’s shift to the people who are more than mad as hell. They’re mad enough to turn their energy into action.

Among these 10 ideas, what’s the most practical for your life?

 

“I just ditched my old 1998 Volvo S70 for a used Prius, and it is so much more fun to fill a 10-gallon tank than an 18-gallon one. And have it last more than a week of heavy Los Angeles commuting. It’s still new to me, so I still kind of giggle every time I fill up the tank. I’m thrilled to put the money I save toward better things.”
— Jennifer

“We save a lot of money in the summer because my wife takes the bus to the south side of Madison to go to work, and I pick her up in the afternoon, about 4 miles south of our home. If I was to take her to work and pick her up, it would be 48 miles round-trip, morning and afternoon. The bus is cheaper.”
— Laverne F., Madison, Wisconsin

“As gasoline was so high for so long, I made a bio-diesel processor from a old electric water heater and made my own fuel for the oil furnace and my old 1984 GMC van with a diesel engine. I still received 21 mpg. Begging for grease was the hard part.”
— Willis W.

“I wish I had a good story for you, but my wife and I drive a plug-in Chevy Volt. We hardly ever stop at a gas station, except perhaps once every 6 weeks or while on an occasional trip. When we top the tank, it seldom takes more than 5 1/2 gallons, i.e. less than $20 worth of premium fuel. The main reason that we stop at gas stations these days is to get an automatic car wash.”
— David and Barbara G., Gaithersburg, Maryland

“Still wondering how to convert my 99 Ford Expedition to NG?”
— Gary S., Laguna Woods, California

(We’re checking around to find a SoCal CNG conversion business. Will update later.)

“I have not visited a gas station since September 2014, when I took delivery of my Tesla. However, I still pay for my daughter’s gasoline, suffer the financial cost, and contribute to the oil industry’s wanton environmental degradation. Savings at the pump could help me fund her college education.”
— Dr. George

“Go electric. I did and am receiving my Tesla next week. No more gas at all.”
— Bob

“Today we bought a 2014 Ford Focus, a flex-fuel vehicle which enables us to use E85 for fuel. A small contribution to energy independence.”
— David

“We need a blender pump [for ethanol] in every station.”
— Melvin M.

“I top off my cars with E85 when I can. I fill up once a month with a discount at Kroger. I am really pushing to get Kroger to provide ETHANOL pumps and shop at the same place!”
— Gerard R., Stone Mountain, Georgia

 

Incidentally, here’s a handy guide to flex-fuel vehicles on the market.

U. of Minnesota’s ethanol study falls flat

Every so often, a new “study” is published that shows why many of oil’s competitors are “bad” in one form or another. Such “studies” are usually widely circulated in the media without much fact-checking. When other experts start looking into the “study,” they usually find that it is anything but scientific (remember all those “studies” that said that smoking is good for you.)

The question each American should ask is, Why are they trying to tell us which fuel we should use? All these studies basically don’t want Americans to be exposed to other fuels (in order to maintain the oil monopoly). Americans are smart enough to decide which fuel is best for them, but that’s what scares the oil monopoly. They don’t want competition at the pump. Take a look at the most recent “study.”

Researchers at the University of Minnesota have stirred up a hornet’s nest by supposedly proving that ethanol is no better than gasoline for air emissions, and electric cars don’t fare much better either, especially if they get their electricity from coal. The study compared the air pollution level of gasoline with 10 alternative fuels and came up with a winner – what they called “renewed methane” — methane captured from landfills, which have no link to fossil fuels.

Air-pollution groups and the ethanol industry pointed out that the study was deeply flawed and based on outdated assumptions.

“On a full lifecycle basis, the study’s results are contradictory to the results from the Department of Energy’s latest GREET model,” the Renewable Fuels Association wrote in a response published the next day. (GREET stands for “Greenhouse gases, Regulated Emissions, and Energy use in Transportation,” a recent standard set by the Department of Energy that attempts to measure all energy use for the different fuels through the entire life cycle. GREET shows ethanol doing fairly well, while the Minnesota study used an older model that is not as favorable to ethanol.)

“There is a substantial body of evidence proving that ethanol reduces both exhaust hydrocarbons and CO emissions, and thus can help reduce the formation of ground-level ozone,” the RFA said. The study “… excludes NOx and SOx emissions associated with crude oil extraction, a decision that grossly under-represents the actual lifecycle emissions impacts of gasoline. Omitting key emissions sources from the lifecycle assessment of EVs and crude oil inappropriately skews the paper’s results for the overall emissions impacts of these fuels and vehicles.”

The study included the entire lifecycle components of ethanol but excluded the lifecycle components of gasoline (like tar sands extraction). This is not a minor omission. It essentially means that the entire report is materially incorrect.

The Urban Air Initiative was also highly critical of the Minnesota report. “The study utterly failed to consider a vast body of research by auto industry and health experts that conclusively show gasoline aromatic hydrocarbons are the primary source of the most dangerous urban pollutants,” said David VanderGriend, president of the Initiative. “The aromatics — which comprise 25–30 percent of U.S. gasoline — are responsible for a wide range of serious health effects, including autism, cancer and heart disease.”

“Urban air pollution, and specifically summertime smog or ozone, is a mix of volatile organic compounds, carbon monoxide, particulates, NOx, and countless other factors. Gasoline itself is a toxic soup of chemicals, but as we add ethanol we clean up that gasoline and protect public health,” added VanderGriend, whose group keeps track of pollutants in cities.

VanderGriend pointed out that ethanol is a source of clean, low carbon octane that is used in federal reformulated gasoline in major U.S. cities. Although it is not required, refiners choose ethanol for its clean-burning properties and its ability to help them meet emission standards. “Excess carbon monoxide has essentially been eliminated in the U.S. due to the presence of ethanol, and ozone violations are at the lowest levels in the history of the automobile,” said the RFA response. According to the EPA, the amount of ozone in the air has decreased 18 percent from 2000 to 2013.

What the Minnesota study completely misses is the role that ethanol is playing in reducing our dependence on foreign oil. People have jumped to the conclusion that because our imports have fallen and because the price of oil has nosedived, we don’t have to rely on oil from countries that oppose our policies at all. Nothing could be further from the truth. We still import about 40 percent of our oil and spend $300 billion in the process. This figure is likely to remain high as oil bounces back from its recent lows. The major chunk of our trade deficit is made up of imported oil.

We still have a lot way to go in freeing ourselves from these responsibilities. All these strategies – ethanol, methanol, compressed natural gas, electric vehicles and others – can play a part. The important thing is to give consumers a choice – as Fuel Freedom Foundation has long recommended. The last thing we want to do is be influenced by studies that are heavily biased against ethanol or any of the other alternatives that threaten the monopoly of gasoline.

Tesla going full speed ahead, but it has competition

Shrugging off any concern about falling gas prices, Tesla is planning to have its medium-priced Model III on the road by 2017. If it meets with anything like the reception of the 2014 Model S, Tesla will be in good shape.

Auto reviewers were ecstatic about the Model S, saying it put Tesla in a class by itself. As Ali Aslani wrote on MasterHerald.com:

If you think electric cars are slow and wretched creatures, you obviously haven’t seen the 2014 Tesla Model S. This vehicle is a beast on wheels that will make you forget half your life’s problems, until you look down at the dash and remember that you cannot pull up to a gas station for refueling, once you run out.

That refueling is becoming less and less common, however, as Tesla’s battery technology has pushed the range for its vehicles to 400 km, or 250 miles. It’s enough for a good commute to work. And recharging stations are becoming more common as Tesla and other auto manufacturers push to have them installed.

What really turns on car enthusiasts, however, is the acceleration possible with an electric motor. Alex Kerston posted a video on CarThrottle.com, in which a user who normally drives a Lamborghini Aventador has just ridden in the 691-hp Model S P85D:

The acceleration is ridiculous. I daily drive an Aventador and I thought I got used to fast acceleration. But no. … As a passenger, you do not get a chance to get ready for it at all. My internal organs were glued to the back of my body. … after about a dozen of those 0-60 accelerations, I felt like I had to puke – probably the first time I’ve felt this way in many years.

The question is, is this the kind of performance ordinary drivers are looking for? The Model III will weigh 1,000 pounds more than the Model S and therefore won’t be in the same class as the roadsters. But at $35,000 to $50,000, it will still be in the higher class of buyers. With all the inconveniences of recharging and being a first mover in the electric field, it will be a wonder if the Tesla standard model will be able to reach the 500,000 sales mark at which the company is aiming.

Meanwhile, other auto manufacturers are not standing still. Last week, Volkswagen, the largest auto company in the world, reportedly bought a stake in the Silicon Valley battery manufacturer QuantumScape, which gives VW access to a technology that could potentially deliver far more range that Tesla’s 400 km. QuantumScape’s solid-state batteries also carry a smaller risk of fire than the lithium-ion batteries used in many electric vehicles, including Tesla’s. Hybrid technology leader Toyota has been developing comparable technology since at least 2010, and EV leader Nissan has been promising similar developments. By the time Tesla comes to market with its lithium-ion-driven Model III, it could end up looking downright conservative in its technology.

Volkswagen’s investment in solid-state batteries is especially interesting, since at one point it was actually copying Tesla’s approach to EV battery technology. In 2009 and 2010, Volkswagen was working with Tesla co-founder Marin Eberhard on Tesla’s cylindrical-style lithium batteries but rejected the technology as too complex when it brought the e-Golf to market. Now Volkswagen is looking to leapfrog Tesla into solid-state technology.

Volkswagen Group is planning a short-term offensive against Tesla. It will bring out the $100,000 electric R8 sports car to compete with the Model S. Also in the works is the forthcoming Q8 crossover coupe. Both cars will be produced by VW’s Audi subsidiary.

Other manufacturers are taking aim at Tesla’s share of the $100,000 electric sports-car market. BMW is likely to add more products to its electric “I” brand and has unveiled an electric powertrain that it’s calling the “Tesla killer.” Porsche, also owned by Volkswagen Group, is said to be planning an electric version of a smaller sedan, code-named the Pajun. Former Tesla investor Mercedes-Benz is also working on an electric version of its flagship S-Class vehicles.

The takeaway is that powerful electric vehicles with a suitable range are no longer going to be a luxury item. If Tesla is successful in breaking through with the Model III, it’s going to be followed quickly by competitors in the same class and perhaps with a different technology.

Despite cheap gas, EV sales were strong in 2014

One narrative for 2014 is that cheap gasoline reduced the incentive for energy-efficient vehicles.

Tell that to all the people who bought electric cars during the calendar year.

With sales data still coming in, it appears certain that U.S. sales of EVs, including both all-electric and plug-in hybrids, surpassed 100,000 units.

That marks the third straight year of sales increases, since the electric vehicles we know today first went on sale in December 2010, according to Green Car Reports. The growth rate won’t come close to 2013, however, when 97,000 EVs were sold, nearly doubling the 2012 total of 53,000.

Nissan is emerging as the sales champion for the year, having moved 30,200 all-electric Leafs, a new U.S. record for an EV. That’s up nearly 34 percent over 2013, when 22,610 Nissan Leafs were sold.

Compare that figure to the Chevy Volt, of which 18,805 were sold — down 19 percent from the previous year, when 23,094 were sold.

According to the Auto Blog, Volt sales really tailed off in December, with just 1,490 units, a 38 percent falloff from the same month in 2013. Nissan sold 3,102 units for the month, up 23 percent from December 2013. The federal government’s $7,500 sweetener might have played a role, as new-car buyers sought to grab that tax savings before the calendar turned.

More Auto Blog:

The Leaf outsold the Volt every month in 2014. The closest gap was 215 units, in February. The biggest was 1,612, in December.

One theory for the Volt slowdown is that potential buyers are waiting for the redesigned 2016 model. Although the car won’t be officially unveiled until the Detroit Auto Show next week, Chevrolet opened the kimono to allow journalists a peek Sunday night at the Consumer Electronics Show in Las Vegas. Check out stories here, here and here.

What about sales of the Tesla Model S, you ask? The company doesn’t post monthly sales reports, so we’ll have to wait until later in the winter for its annual report. But Inside EVs mentions both Nissan and Tesla “hitting it out of the park” in December.

Inside EVs also has a breakdown of how other anticipated models sold during the year. For instance, Cadillac moved 1,310 units of its plug-in ELR. And BMW moved 6,092 units of the i3, “not bad considering it was only available for 7 full months in the US.”

Also:

Current owners got some good news this month as earlier, long standing issues surrounding the onboard chargers being muted to avoid failure incidents has now been rectified and BMW has a recall/repair bulletin out for owners to now get new units installed. 7.4 kW charges again for everyone!

Tesla won’t produce the Model X until it’s sufficiently awesome

Elon Musk would rather wait to put out an eagerly awaited product than push one out that’s not awesome.

That was apparent from the language used in Tesla’s Q3 newsletter, published Tuesday (emphasis ours):

We recently decided to build in significantly more validation testing time to achieve the best Model X possible. This will also allow for a more rapid production ramp
compared to Model S in 2012.

In anticipation of this effort, we now expect Model X [the company’s forthcoming SUV] deliveries to start in Q3 of 2015, a few months later than previously expected. This also is a legitimate criticism of Tesla – we prefer to forgo revenue, rather than bring a product to market that does not delight customers. Doing so negatively affects the short term, but positively affects the long term. There are many other companies that do not follow this philosophy that may be a more attractive home for investor capital. Tesla is not going to change.

Tesla’s earnings beat analyst’s expectations, but some weren’t impressed by the pace of deliveries by the luxury electric-car maker. Tesla said it would deliver about 33,000 vehicles in 2015, lowering its estimate by 2,000. John Thompson, CEO of Vilas Capital Management, said on CNBC’s “Closing Bell” program that Tesla is “grossly overvalued … A company making 33,000 cars is worth half of Ford Motor Company today.”

Still, Tesla’s stock closed at $240.20 Friday, down 98 cents for the day, but up from $230.97 since Tuesday’s earnings report. Ford closed at $14.17, down 2 cents.

(Photo: Darren Brode, Shutterstock)

2014 BMW i3 REx Vs Chevy Volt: Range-Extended Electric Cars Compared

[Blog] Until recently, the Chevy Volt was the only range-extended electric car available in the U.S. I’ve driven a Volt for almost three years now, and it’s been a splendid car–quiet, smooth, peppy, and amazingly economical

Tesla Takes It to the Next Level

This will be a week for watching Tesla, not only because the company’s stock had soared to new heights but because Elon Musk seems poised to take it to the next level – manufacturing batteries.

Musk has scheduled a conference call this week and gives every indication is he will be announcing plans for a new “Giga factory” where the Silicon Valley auto company will manufacture its own batteries. “Very shortly, we will be ready to share more information about the Tesla Giga-factory,” Musk told shareholders in his 4th quarter letter last week. This will allow us to achieve a major reduction in the cost of our battery packs and accelerate the pace of battery innovation.”

In a way the company has little choice. If Tesla is to move down-market from its current luxury niche – which has always been the plan – it is will need to buy the equivalent of the world’s entire current output of lithium-ion. The easiest thing to do is to go into manufacturing itself.

As usual, Musk will be doing things with a flair. Rumor is that he will be combining with SolarCity, which is run by his cousin Lyndon Rive, to produce a facility running largely on solar power. This will take us way beyond fossil fuels into the kind of world environmentalists imagine, where intermittent solar and wind power are stored to provide the kind of “high-9’s” reliability required by an industrial, digital society. And the key to that will be the same thing that Musk is working on now – batteries.

This kind of convergence is the reason for the number-two rumor of the week – that Tesla and Apple have engaged for a possible collaboration, even a merger. Last week San Francisco Chronicle reporters Thomas Lee and David Baker revealed that Apple’s M&A specialist Adrian Perica met with Musk last spring. What did they talk about?  Obviously a joint venture is in the air. Remarkably, only last October German stock analyst Adnaan Ahmad wrote an open letter to Apple saying it should consider entering the auto business by buying Tesla. The reasoning is as follows:

  • Despite its reputation for cutting-edge products, Apple’s traditional market for personalized devices seems to be reaching its limits. Sales of smart phones and tablets are maturing. Apple’s Next Big Thing is supposed to be a smart watch. A watch?  Is that an appropriate ambition for the world’s most innovative company?  As Steve Jobs did so many times, Apple need to enter an entirely new business and turn it upside down.
  • Apple is sitting on $160 billion in cash. It could literally buy almost any company in the world. Even with a market capitalization that is inflated by high expectations, Tesla is only worth $24 billion. The whole thing is doable.
  • Tesla needs an infusion of cash if it is to break out of its luxury niche and provide a car for the masses. The company’s proposed Gen III would sell for $35,000 and compete with the Chevy Volt and the Ford Focus. But more than half of that cost is in the battery. If Tesla can achieve vertical integration and come up with some new innovations, it may be able to turn a profit. But Apple is in the battery business as well, since most of what’s under the hood in an iPad or iPhone is lithium-ion. There is a convergence taking shape.

Of course there are many things working against this vision. Both Tesla and Apple may deal in lithium-ion batteries but designs aren’t the same and the chemistry is different. Also, when it comes to storing huge amounts of electricity at the factory, lead-acid remains the preferred technology. It’s cheaper in a way that lithium-ion will find if very difficult to duplicate.

Still, there seem to be breakthroughs coming in battery research almost every week. Only two weeks ago, researchers at Harvard announced the invention of a “flow battery” that stores a charge in organic liquids rather than metals. At the University of Limerick, researchers announced the development of a new germanium nanowire-based anode that greatly expands the capacity and lifetime of lithium-ion batteries. And researchers at Stanford said they had developed a silicon anode based on the design of a pomegranate seed that improves lithium-ion storage capacity by a factor of 10. All this is within the space of the last two weeks.

Batteries are hot and Elon Musk will be walking right into the middle of it. He has proved Tesla’s charging system has legs. The first Model S just made the 3,464-mile journey from Los Angeles to New York in 76 hours using Tesla’s new network of supercharger stations. Recharging has been reduced to just over an hour. Model S sales hit 22,500 for 2013, exceeding expectations. With all this success under its belt, the company is preparing to move down-market, where it can really have an impact on our fossil fuel dependence.

Like many Silicon Valley entrepreneurs, Musk is obsessed with space travel. He says he wants to be buried on Mars – “and not on impact.” With Steve Jobs gone, Musk may be the man to take Silicon Valley’s venture into alternative automobile propulsion to the next level.