Tesla Motors Inc (TSLA) Powerwall Biz Challenged by U.S. Department of Energy

Tesla Motors Inc. (TSLA) Powerwall

Tesla  Motors Inc is not limiting itself to electric cars in its quest to clean up the environment; the firm is also trying to change the energy storage industry with its Powerwall and Powerpack products. The Powerwall is a “is a home battery that charges using electricity generated from solar panels, or when utility rates are low, and powers your home in the evening when the sun is out or when utility rates are high”.

Tesla Motors has been recording great success with its energy storage products. The Powerwall is sold out in the U.S., UK, Australia and potential buyers in new markets can’t wait to get their hands on the batteries. The success of Tesla Energy initiatives is seen in the fact that the battery division turned a profit in Q4 2015 to help reduce the losses that Tesla recorded in its EV business. However, Tesla might not have the energy storage market to itself much longer as a wing of the U.S. Department of Energy plans to bring rival technologies to the market.

U.S. energy agency has a target on Tesla

Reuters reported that Advanced Research Projects Agency-Energy or ARPA-E a wing of the U.S. Department of Energy might have placed a target on Tesla Motors . ARPA-E is focused on funding breakthrough technologies that have the potential to transform energy markets – the ARPA-E director claims that the agency has seen better energy storage technologies that can beat Tesla’s current offerings in the Powerwall and Powerpack.

Director Ellen Williams in an interview earlier this week revealed that the energy storage market should be ready to seen next-generation batteries that will leave Tesla’s Powerewall in the dust. In her words,

“What Musk has done that is creative and important is drive the learning curve. He’s decided to take an existing, pretty powerful battery technology and start producing it on a very large scale… But it’s not technology innovation in the sense of creating new ways of doing it. We are pretty well convinced that some of our technologies have the potential to be significantly better.”

Startups gang up on Tesla

Last week, I wrote about a Kickstarter campaign for backing a product that might rival Tesla in the energy storage market. The Orison home battery is already gaining traction on Kickstarter, the project has raised $276,247 to  mark a 452.49% increase above its $50,000 target. Orison could reduce Tesla’s market share if its product makes it to the market.

Alveo Energy is another startup trying to enter the energy storage market with an improved battery technology. Alveo Energy is a San Francisco area startup that wants to create a high-power battery technology with a long-lifecycle. Alveo Energy receives funding from ARPA-E and its CEO, Colin Wessells notes that the energy storage industry is “in a burst of innovation right now… Five years from now there will be a few technologies out there that nobody saw coming.”

ARPA-E  has the wherewithal to back technologies that could rival Tesla Motors . The agency came alive in 2009 with a $400M budget and President Barrack Obama’s budget request should provide $1B funding to the agency in five years. The ARPA-E has nothing against Tesla, but it is in the best interest of government agencies to open up the energy storage market for as many players as possible. Tesla needs to stay on top of its game to avoid a top-dog VS underdog scenario when these startups begin to push their products to the market.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.


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