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
Quick Charge Podcast: November 29, 2023
New episodes of Quick Charge are recorded Monday through Thursday and again on Saturday. Subscribe to our podcast in Apple Podcast or your favorite podcast player to guarantee new episodes are delivered as soon as they’re available.
Stories we discuss in this episode (with links):
Listen & Subscribe:
Share your thoughts!
Drop us a line at firstname.lastname@example.org. You can also rate us in Apple Podcasts or recommend us in Overcast to help more people discover the show!
UAW launches campaign to unionize all automakers at once – Tesla, Toyota, etc
The UAW has launched an unprecedented campaign to unionize the entire US auto sector at once, with thousands of auto workers at 13 companies announcing simultaneous unionization campaigns.
After UAW’s big strike win, winning 25%+ pay increases at the “Big Three” American automakers after a simultaneous strike at GM, Ford and Stellantis, the union is looking to maintain that momentum and go bigger.
Immediately after declaring victory, UAW President Shawn Fain said that in the next negotiation in 2028, UAW wants to come back to the bargaining table to negotiate not just with the Big Three, but with “a Big Five or a Big Six” – implying that the union planned to expand to other automakers. And President Biden said that he would support a UAW push to unionize Tesla and Toyota.
Now we’ve seen an official announcement that UAW isn’t just looking to unionize two or three more automakers, but all of them at once. Typically, unionization campaigns focus on a single company at a time, but here UAW is targeting a whole sector with simultaneous campaigns at each individual company. This seems like a tall order, but UAW’s triple-strike against the Big Three seemed to work out well, so it’s now applying that simultaneous tactic to organizing new union drives.
In service of its goal, UAW launched a new website at uaw.org/join, asking workers at each company to sign their union card. The website mentions several automakers by name, and has links to individual campaigns for each automaker where workers can go to express their interest in unionizing:
The campaign was accompanies by a video narrated by Fain making his union pitch. In short, UAW says that automakers and investors are making record profits, but that worker compensation has not kept up. The video specifically mentions Tesla and Rivian’s recent quarterly results, and also states that the Japanese/Korean automakers have combined to make $470 billion in profits, and the German automakers have made an additional $460 billion, in the last ten years.
Since the UAW’s big wins, other automakers have moved to increase pay to (partially) keep up with pay increases at the Big Three. VW, Hyundai, Toyota and Honda have all announced hikes in pay, showing how union wins can buoy an entire industry by making automakers compete for workers with higher pay.
But UAW doesn’t want to stop at a few voluntary pay hikes from other companies, it thinks that unionizing those companies can give workers a better deal. One worker at Toyota’s Georgetown, Kentucky plant put it thusly:
We’ve lost so much since I started here, and the raise won’t make up for that. It won’t make up for the health benefits we’ve lost, it won’t make up for the wear and tear on our bodies. We still build a quality vehicle. People take pride in that, but morale is at an all-time low. They can give you a raise today and jack up your health benefits tomorrow. A union contract is the only way to win what’s fair.
Jeff Allen, 29-year Toyota assembly worker
UAW also quoted workers at Hyundai, VW, Mercedes and Rivian in its release, focusing on how they think unionization would improve safety and benefits at these automakers.
Unions are having a bit of a moment in the US, reaching their highest popularity ever since surveys started asking about them.
Much of union popularity has been driven by COVID-related disruptions across the economy, with workers becoming unsatisfied due to mistreatment (labeling everyone “essential,” companies ending work-from-home) and with the labor market getting tighter with over 1 million Americans dead from the virus and another 2-4 million (and counting) out of work due to long COVID.
Unions have seized on this dissatisfaction to build momentum in the labor movement, with successful strikes across many industries and organizers starting to organize workforces that had previously been nonunion.
But union membership has been down over several decades in the US, and as a result, pay hasn’t kept pace with worker productivity and income distribution has become more unequal over time. It’s really not hard to see this influence when you plot these trends against each other.
It’s quite clear that lower union membership has resulted in lower inflation-adjusted compensation for workers, even as productivity has skyrocketed. As workers have produced more and more value for their companies, those earnings have gone more and more to their bosses rather than to the workers who produce that value. And it all began in the 80s, around the time of Reagan – a timeline that should be familiar to those who study social ills in America.
All of this isn’t just true in the US but also internationally. If you look at other countries with high levels of labor organization, they tend to have more fair wealth distribution across the economy and more ability for workers to get their fair share.
We’re seeing this in Sweden right now, as Tesla workers are striking for better conditions. Since Sweden has 90% collective bargaining coverage, it tends to have a happy and well-paid workforce, and it seems clear that these two things are correlated. And while that strike is continuing, meaning we haven’t yet seen the end of it, most observers think that the workers will eventually get what they want since collective bargaining is so strong in that country.
These are all reasons why, as I’ve mentioned in many of these UAW-related articles, I’m pro-union. And I think everyone should be – it only makes sense that people should have their interests collectively represented and that people should be able to join together to support each other and exercise their power collectively instead of individually.
This is precisely what companies do with industry organizations, lobby organizations, chambers of commerce, and so on. And it’s what people do when sorting themselves into local, state, or national governments. So naturally, workers should do the same. It’s just fair.
Rivian R1T could add a projector for movies on the go
The Rivian R1T might get an exciting upgrade. The electric pickup can drive through 3+ feet of water, rock crawl a 100% grade, and take off like a sports car. But what if the Rivian R1T had a mobile projector that could be easily stored in the gear tunnel? That’s what Rivian is scheming up.
Rivian files patent for R1T mobile movie projector
Rivian’s R1T electric truck is the ultimate adventure vehicle. It recently made history as the first EV to win the off-road Rebelle rally, the longest of its kind in the US.
The truck continues improving through OTA updates that add fun new features, range, and more. One of its most recent improved the ride quality of its vehicles. By building its cars from the ground up, Rivian has a major advantage.
Like Tesla, the EV maker focused on software and “having the ability to configure every piece of hardware,” according to Wassym Bensaid, Rivian’s VP of software development.
Rivian can use this advantage to create unique products that integrate into its EVs. One of its most recent ideas is a mobile projector.
According to a new patent filing for a “vehicle entertainment apparatus,” the Rivian R1T could soon see an added movie projector.
The patent, filed November 23, details a kit that can include a projector, screen, and at least one speaker. The kit is attached to a shuttle that slides in and out of the gear tunnel for easy storage.
Once extended, the projector can be rotated into position. It will also include a mirror to reflect the projected light onto the screen without harming quality. Meanwhile, the pole to hold the screen will fit into several spots.
The setup enables a mobile entertainment setup in little to no time. Everything can be stored in the gear tunnel while not in use. When ready, it can just slide out and set up.
Rivian is including everything needed for the ultimate movie night on the go. And the best part – everything is powered by the R1T.
Although a movie projector may seem like a wild idea to some, that’s right up Rivian’s alley. The company has developed several add-on options like a three-person tent and the Camp Kitchen.
Many were dissapointed when Rivian discontinued the Camp Kitchen from its gear shop earlier this year. The $5,000 add-on included a pull-out kitchen complete with two induction cooktops, a water tank, collapsable sink, and more.
Rivian CEO RJ Scaringe said on the MKBHD podcast that the idea was more popular than expected. However, Rivian is redesigning it for something that doesn’t take up the entire gear tunnel.
Maybe a Rivian R1T movie projector isn’t that far off after all. Meanwhile, Rivian will likely offer a redesigned camp kitchen first.
Would you consider buying Rivian’s movie projector add-on? Let us know what you think in the comments.
Sports1 year ago
‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
Sports8 months ago
MLB Rank 2023: Ranking baseball’s top 100 players
Environment6 months ago
Japan and South Korea have a lot at stake in a free and open South China Sea
Sports2 years ago
Team Europe easily wins 4th straight Laver Cup
Environment9 months ago
Game-changing Lectric XPedition launched as affordable electric cargo bike
Technology2 years ago
Game consoles were once banned in China. Now Chinese developers want a slice of the $49 billion pie
Politics2 years ago
Have the last few wobbly weeks seen a turning point for Johnson as PM?
Business1 year ago
Bank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway