Of late, Tesla’s cars have come to seem a bit hazardous. Their self-driving features have been linked to hundreds of accidents and more than a dozen deaths. Then, earlier this month, the company recalled its entire fleet of Cybertrucks. A mechanical problem that trapped its gas pedal, as InsideEVs put it, “could potentially turn the stainless steel trapezoid into a 6,800-pound land missile.”
Along the way, Tesla—which did not respond to multiple requests for comment—has defended its cars and autopilot software. As of last week, the company told federal regulators that the Cybertruck malfunction had not been linked to any accidents or injuries. But even resolving every safety concern may not stop Tesla’s entire EV business from becoming a hazard. Yesterday afternoon, the world’s most valuable car company released its earnings report for the first quarter of 2024, announcing that its net income had dropped 55 percent from a year ago. On an investor call shortly after, Elon Musk could offer only a vague euphemism to describe what has become an especially disastrous month: His car juggernaut “navigated several unforeseen challenges.” Just in April, Tesla has announced its first drop in sales since 2020, recalled one line of vehicles and reportedly canceled plans for another, and begun mass layoffs. There are still, somehow, six days left for the month to get worse.
Whether Musk can sustain his EV empire is now in doubt. He told investors that Tesla’s primary focus is now on AI and self-driving cars. But even if that pivot fails, the company has positioned itself to be on the edge of another, perhaps more crucial part of the green transition: delivering and storing America’s power. Tesla’s EV chargers are ascendant, if not dominant, as are its huge batteries that store renewable energy for homes and even entire neighborhoods. Profits from Tesla’s energy business were up 140 percent compared with the same period last year, and Musk asserted yesterday that the Division will grow significantly faster than the car business.” The company’s future may not lie in following the footsteps of Ford, then, so much as those of Duke Energy and Con Edison. Tesla, in other words, is transforming into a utility…
… Since 2019, the company has been selling “Megapacks”—huge batteries that hold enough electricity to temporarily power thousands of homes—to grid operators in New York, Massachusetts, California, Dubai, Australia, the United Kingdom, and elsewhere, as well as to private customers, including Apple. Tesla is continuing to ramp up the factory in California that manufactures these batteries, as well as building another in Shanghai. Until recently, there hasn’t been much competition, and some analysts have predicted that the Megapack business could one day be worth “substantially more” than Tesla’s cars.
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