Tesla’s “Flywheel” Approach Is The Secret To Its Success
In physics, a flywheel is a rotating disk that stores kinetic energy in its momentum and then spins that energy out to a nearby engine. In the context of business, as the flywheel rotates, it increases output or revenue without increasing input or cost.
Tesla, best known for being an all-electric car company, is, well, much more than just a car company. It has disrupted a legacy industry with a new business model and consumer approach. But Tesla didn’t stop there. It expanded to new industries, grabbed a stake in key infrastructure sectors, worked to decentralize power distribution, and now offers a new alternative to today’s utility industry. Tesla’s end products are state-of-the-technological-art — all of which interconnect in a flywheel that incites consumer allegiance across multiple sectors and keeps those consumers coming back to Tesla for more — in a flywheel effect, essentially.
Tesla’s mission statement is: “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Today, Tesla builds not only all-electric vehicles, but also scalable clean energy generation and storage products, all part of a business model that prods the world to stop relying on fossil fuels and move towards a zero-emission future.
The intersecting notions of a flywheel in this article were inspired by Post Corona — From Crisis to Opportunity, by Scott Galloway (2020). The book draws upon the metaphor to suggest that, when today’s consumers are introduced to one product within a brand, they are more likely to purchase other products within that same brand. Companies today, Galloway explains, should be focusing on the reciprocal nature of consumerism so that the lure of one product leads consumers to other, different products made by the same company.
In the book, the author, an NYU Stern School of Business professor, unpacks how “tech” used to be a “narrowly defined industry consisting of companies that made computer hardware and software, which companies in ‘other’ industries bought for their business.” No longer is tech so specifically grounded. As an example, Galloway explains that combined tech/auto company Tesla appeals “through every aspect of its strategy: pricing, production, marketing, and even its leadership.”
In a February regulatory filing, Tesla acknowledged CEO Elon Musk’s numerous commitments. “Although Mr. Musk spends significant time with Tesla and is highly active in our management, he does not devote his full time and attention to Tesla,” the filing indicated. It described Musk’s leadership in SpaceX and “other emerging technology ventures.” Musk’s influence extends beyond Tesla to a company that merges the human brain with computers, Neuralink, along with a tunnel-building firm, The Boring Company.
In essence, the Tesla flywheel concept suggests that a person who purchases a Tesla Model 3 is more likely to add range at a Tesla Supercharger and eat at a Tesla restaurant. Later, when growing into other renewable energy options, that same consumer is more likely to choose Tesla Solar and Powerwalls over a competitor’s offerings. And who knows what else?
The Tesla flywheel concept makes the company very appealing to some investors. In fact, Canaccord Genuity estimates that Tesla will reach $8 billion in revenue by 2025.
Tesla Energy Storage alongside Use
The Tesla company website acknowledges that “electric cars, batteries, and renewable energy generation and storage already exist independently, but when combined, they become even more powerful.” That confluence is the essence of the Tesla flywheel.
EVs and other renewable energy sources rely on batteries, and Tesla has refused to relinquish its full autonomy as it grows into different products and sectors. As elsewhere, Tesla is planning for its own battery production in China and has been advertising for technicians for its Shanghai facility in recent months, part of better per unit profitability in the region.
The Tesla Energy division provides stationary storage batteries for residential (Powerwall), commercial (Powerpack), and utility-scale (Megapack) applications. Musk has noted on several occasions that Tesla Energy could someday become bigger than Tesla’s automobile business.
Storage is not just about enabling renewable energy — it’s also an important tool for ensuring the reliability of the grid, smoothing out peaks in demand for power, and preventing sudden surges that can overload local distribution systems.
Tesla’s Core Electric Vehicle Catalog
New regulations on safety and vehicle emissions, technological advances, and shifting customer expectations are bringing electric vehicles (EVs) into the consumer transportation mainstream. The Tesla flywheel is evident within its EV business model, which is based on 3 levels of consumer service: selling, servicing, and charging its electric vehicles, which maintains control over sales and service.
The Washington Post says that Musk’s “impulsive leadership” has vaulted Tesla from its initial entry “as an upstart electric vehicle pioneer to the world’s most valuable automaker.” Fortune named him its 2020 Businessperson of the Year.
An international network of Tesla-owned showrooms and galleries, mostly in urban centers, is based on direct sales and service, not franchised dealerships. The showrooms are complemented by internet sales as well as Service Plus centers. In some areas, Tesla mobile technicians make house calls, and service can even occasionally be delivered remotely — without ever physically touching the car.
Tesla has created its own network of “supercharger stations” where drivers can charge their Tesla vehicles in about 30 minutes using a proprietary network. The highly anticipated “Full Self-Driving” suite will be another way of allowing longer and safer road trips.
Future additions to the Tesla catalog include the Cybertruck, an all-electric pickup truck with angular proportions and stainless steel exoskeleton, and a Semi, which will invigorate long-haul trucking with more benefits for drivers and transit companies.
The Tesla Gigafactory Flywheel Phenomenon
Tesla’s has 4 “gigafactories” (‘giga’ stems from gigawatt-hour, or GWh, here):
- Giga Nevada — in Sparks, near Reno, Nevada;
- the Solar City Gigafactory at Buffalo, New York (Giga Buffalo? Gigafactory 2?);
- Giga Shanghai — the 2019 Tesla plant in Shanghai, China; and,
- Giga Berlin — the new European Tesla gigafactory, which is being constructed in Grünheide, near Berlin, Germany.
Three main gigafactory features are part of the Tesla flywheel phenomenon.
- Separate from their scale, Tesla’s organization of production reverses much current conventional wisdom regarding production geography. For example, Tesla’s automotive facility in Fremont, California, reconcentrates manufacturing onsite as in-house brand componentry, especially heavy parts, or by requiring distant global suppliers to relocate in proximity to the main manufacturing plant.
- As an electric vehicle producer, Tesla’s production and logistics infrastructures are important in meeting greenhouse gas mitigation and the reduction of global warming.
- Tesla’s deployment of Big Data analytics, artificial intelligence (AI), and predictive management are important. Gigafactory logistics contribute to production and distribution efficiency. Company effectiveness is a primer for all future industry and services as they seek to minimize time-management issues. Methods of reduction of wasteful energy usage become evident through dataset analysis.
Tesla’s global reach is extending to Europe and Asia. Tesla Motors India and Energy Private Limited was incorporated on January 8, 2021. Registered in Bangalore — the country’s technology hub — the company would start with sales and then potentially move on to assembly and manufacturing, Nitin Gadkari, India’s transport minister, said. Also see:
The Long Reach of Tesla’s Flywheel
Tesla solar customers from now on will buy power systems that feed exclusively to Powerwalls. Powerwalls will interface only between the customer’s utility meter and house main breaker panel, enabling a relatively simple install and seamless whole house backup during utility dropouts, according to Musk.
Updates reflect customer feedback — many people thought their battery-less solar system would work in a blackout, only to be disappointed when it didn’t. Moreover, Tesla consumers seemed eager to gain protection against blackouts, so streamlining the offerings into paired technologies made sense — and deepened the Tesla flywheel effect.
CleanTechnica’s Zachary Shahan has outlined the extensive list of internal “Tesla companies” and their immediate competitors. If there was any doubt about Tesla’s flywheel effect, look no farther than these intersections of products and consumer loyalty to understand Tesla’s ongoing and seemingly impossible accomplishments.
- Tesla Cars vs. BMW & Audi & Toyota & Honda — car manufacturing
- Tesla Network vs. Lyft & Uber — mobility services
- Tesla Supercharging vs. Electrify America & EVgo & Ionity & Fastned — fast charging
- Tesla Charging vs. ChargePoint & EVBox & many others — home/destination chargers
- Tesla Autopilot vs. Mobileye/Intel & Waymo & Cruise/GM & Nvidia — self-driving/driver-assist tech
- Tesla Solar vs. Sunrun & Vivint Solar — solar panel installation
- Tesla Solar Tech vs. SunPower & Trina Solar — rooftop solar generation tech
- Tesla Energy Storage vs. AES & SimpliPhi & sonnen — stationary energy storage
- Tesla Grid Services vs. Utilities around the world & Stem — grid services
- Tesla Insurance vs. Allstate & Geico & State Farm — insurance
- Tesla Stores vs. Auto dealerships — auto sales & service
- Tesla Trucks vs. Freightliner/Daimler & MAN Truck and Bus & Scania & Iveco — semi trucks
- Tesla Infotainment vs. Apple & Google — in-car infotainment
- Tesla Computers vs. Nvidia & Intel — computer chips, systems on a chip, supercomputers
- Tesla Batteries vs. LG Chem & CATL & Panasonic — battery cells
- Tesla Seats vs. Faurecia & Johnson Controls & Lear Corporation & TS Tech & Toyota Boshoku — automotive seats
- Tesla Robots vs. Kuka & ABB & Yaskawa Electric Corporation — industrial robots for manufacturing
Tesla offices in Fremont, California. Photo by Zachary Shahan, CleanTechnica.
Nexamp just pulled off something that could speed up clean energy deployment across the US – and potentially lower costs for everyone. The Boston-based solar developer just finished building three new solar farms in Maine and Massachusetts. But instead of waiting on the utility to handle all the grid hookup work, Nexamp did it themselves.
That might not sound groundbreaking at first, but in the world of renewable energy, it’s a pretty big deal. Normally, utilities are in charge of any grid upgrades and interconnection work needed before a new solar project can start sending power to homes and businesses. That process can be very slow and expensive.
Nexamp’s new approach, called “self-performance,” flips the script. It lets developers take on some of that work, like ordering and installing equipment, so they don’t have to sit around waiting for the utility to schedule it. That means solar farms can get online faster, which gets clean power to the grid sooner and keeps project costs in check.
The three projects that kicked off this self-performance effort are:
- Hartland Solar – 1.2 MW DC in Hartland, ME
- Barre Road Solar – 1.3 MW DC in New Braintree, MA
- Summit Farm Solar – 2.6 MW DC, also in New Braintree
Nexamp didn’t go rogue – they worked closely with Central Maine Power and National Grid on the interconnection designs, safety standards, and technical specs. But by handling the actual procurement and construction, Nexamp had way more control over cost, timing, and supply chain headaches.
“Self-performance lets us take much greater control over interconnection procurement and construction,” said Daniel Passarello, Nexamp’s lead consulting engineer for grid integration. “We can move much of the interconnection work forward at the same time as the solar farm build instead of treating them as separate. That helps us bring projects online faster and stay closer to budget.”
It also helps that Nexamp already has solid relationships with suppliers. Instead of going through multiple layers of utility procurement, they can go straight to the source, fast.
That kind of streamlining is exactly what the solar industry needs right now. Community solar is booming – as of the end of 2024, nearly 8 gigawatts of it have been installed across the US, according to the the Solar Energy Industries Association (SEIA), and that number is expected to almost double by 2030. But bottlenecks in the interconnection process slow things down.
Sara Birmingham, VP of state affairs at SEIA, called Nexamp’s move a step in the right direction. “We must modernize and streamline the interconnection process to keep pace with fast-growing demand,” she said. “Self-performance is one of several innovative approaches that can accelerate project timelines and lower costs, which benefits all ratepayers.”
Read more: Walmart and Nexamp are rolling out 31 solar farms in 5 states
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When Genesis first previewed its full-size electric SUV, the coach doors were one of the biggest highlights. It looks like it will actually make its way into the production vehicle. A Genesis GV90 model was spotted in the US for the first time with coach doors, offering a glimpse of the upcoming ultra-luxury SUV.
Genesis GV90 spotted with coach doors in California
We got our first look at the full-size luxury SUV after Genesis unveiled the Neolun concept at the NY Auto Show last March.
Genesis said the concept was its “ultra-luxe vision of luxury SUVs,” and it wasn’t kidding. When it arrives, it will be sold as the GV90 as the brand’s new flagship vehicle.
The GV90 is not just a pretty-looking luxury SUV. It’s also loaded with Hyundai’s most advanced software and tech. According to Luc Donckerwolke, Genesis’ head of creative design, “it’s the epitome of timeless design and sophisticated craftsmanship.
Last month, we got a sneak peek of the interior after a production-ready GV90 was caught in California. Although somewhat toned down from the original concept, the cabin still featured many of the same elements.
Another Genesis GV90 was recently spotted in California, with actual coach doors. The new images from KindelAuto (via TheKoreanCarBlog) show a camouflaged vehicle with a hinge at the rear, where the coach doors will open.
Genesis said that B-pillarless coach doors are now feasible in production vehicles, like the GV90. However, don’t expect it to come standard on all models.
The feature will likely be reserved for higher-priced trims. We’ve seen other variants, featuring traditional doors, that are being tested in the US and Korea.
Genesis is expected to launch the GV90 in mid-2026. We will learn prices and final specs closer to launch, but the flagship electric SUV is set to debut on Hyundai’s new eM platform.
Hyundai said the platform is designed for EVs across all segments and will “provide a 50 percent improvement in driving range” compared to current EVs. It will also support Level 3 or higher autonomous driving capabilities and OTA software updates.
Source: KindelAuto, TheKoreanCarBlog
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Elon Musk has finally confirmed that Tesla’s new ‘affordable’ electric car is just going to be the Model Y in a cheaper format.
Musk has ended months of speculations and misinformation, which he partly created, about Tesla’s upcoming cheaper electric vehicle model.
Since last year, Tesla has guided “launching new affordable models” in the first half of 2025.
We are past the first half of 2025, but Tesla confirmed yesterday that the “first build” of the new model was produced in June, and it will launch later this year.
During the shareholders’ call following the earnings results yesterday, Tesla was asked about what the new affordable model would look like. Tesla’s CFO, Vaibhav Taneja, initially stated that they wouldn’t disclose details about the design, but then Musk interrupted him and said, “It’s a Model Y.”
It’s hard to hear exactly on the call because he talked over Taneja, but he said, “the cat is out of the bag” and confirmed that the new vehicle is simply a Model Y.
Electrek has been reporting on this fact all year. We have known for months that Tesla’s upcoming “new affordable models” are Model 3 and Model Y with a stripped-down interior with fewer features, like no rear screen, and cheaper materials:
However, this fact was not accepted in the Tesla community because CEO Elon Musk falsely denied a report last year about Tesla’s “$25,000” EV model being canceled.
The facts are that Musk canceled two cheaper vehicles that Tesla was working on, commonly referred as “the $25,000 Tesla” in early 2024. Those vehicles were codenamed NV91 and NV92, and they were based on the new vehicle platform that Tesla is now reserving for the Cybercab.
Instead, Musk noticed that Tesla’s Model 3 and Model Y production lines were starting to be underutilized as the Company faced demand issues. Therefore, Tesla canceled the vehicle programs based on the new platform and decided to build new vehicles on Model 3/Y platform using the same production lines.
Now, only the new Cybercab is going to be based on the new unboxed platform.
During the conference call last night, Musk stated that the primary goal of the more affordable Model Y is to expand the market by making the vehicle more accessible to a broader audience. He suggested that it will go on sale in Q4.
Electrek’s Take
Finally, we can put this to rest. I think we can expect something similar to what Tesla did with the Model 3 in Mexico.
I think we can expect changes, such as using cloth materials instead of vegan leather, no rear display, no ambient lighting, and a lesser audio system.
In the case of the Model Y, Tesla may consider dropping some exterior lighting features, such as the light bars.
I wouldn’t be surprised also to see some powertrain changes. Maybe a less powerful RWD motor.
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