Tesla’s 100-Day Countdown Pushes Team to Do the Impossible

Tesla’s 100-Day Countdown Pushes Team to Do the Impossible

While many question the feasibility of Elon Musk’s bold claims, this fall he put his money where his mouth is, embarking on an ambitious energy project in South Australia. We are betting that the project is on track, and will be completed the first week of January within the aggressive 100-day window. Get ready to score one for Musk pushing his team to the do the seemingly impossible. More importantly, hitting the 100-day goal is a positive for the future of Tesla, given that companies who achieve the impossible change the world.

Several months after storms left critical power infrastructure damaged leading to frequent rolling blackouts, a twitter conversation led Musk to claim Tesla can build the world’s largest grid-scale battery in 100 days (powered by wind farm), or it would be free. Shortly afterwards, Tesla was selected out of 90 bids from other companies. The papers were signed on Friday, September 29th, beginning the 100-day countdown that will end on January 7th, 2018. If it’s not finished on time, Tesla stands to lose about $50 million.

What they’re doing.

Today, we believe the project is largely complete and is expected to be operational by December 1st. Tesla was granted approval to start working on the project before signing the grid connection agreement (Sep 29), making a true countdown difficult to estimate. In our minds the clock starts when ground is broken, however, we are confident the time constraint will still be met as a Dec 1 completion implies a start date as early as mid-August.

The battery, which is actually a system of connected Powerpacks, will be plugged into a wind farm near Jamestown and operated by French renewable energy company Neoen. With a capacity of 100MW (next largest is 30MW), or enough to bring power to 30,000 homes, the system is the largest in the world by a factor of 3 and will bring stability back to the region that is powered by 48% renewable energy. As we detailed in a note on Tesla’s mission here, grid-scale battery storage is one solution to the key problem with renewables – there is a disconnect between when power is generated and when it needs to be deployed. Most grids use dirty and expensive “peaker plants” to meet peak demand each day, but batteries can be charged during times of low demand and deployed as needed.

Why it matters… reality distortion field 2.0.

This project is important for two reasons, but it must be completed on time. First, it would prove that Musk can actually meet the deliberately aggressive deadlines that he sets, something that has investors and the public concerned after missing Model 3 production goals. Companies that change the world set and meet aggressive goals. Think back to how Steve Jobs’ “reality distortion field” propelled Apple to perfect the smart phone and launch mobile as we know it today. Musk drives his teams with similar goals that seem distorted from reality. One Tesla employee recently mentioned to us that she’s ok with Musks’ targets, stating “anyone can set a goal that’s achievable, leaders set goals that are hard to reach”. Second, it would be a massive validation for Tesla’s Energy segment that is often seen as a distraction from their core business. If Tesla can prove battery installations to be both functional and profitable it may serve as a catalyst for similar projects in the future, including a potential rebuild of Puerto Rico’s power infrastructure which remains a possibility. With the project tracking ahead of the deadline, we expect this to be a win for Tesla Energy and a step toward the public buying into Tesla’s mission of transitioning the globe to sustainable energy.

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