How Tesla Convinced the Car Industry to Go Green

Elon Musk used the money argument — and it worked

Pictures from Wallpapersmug & Wikimedia Commons.

“We are going to run out of oil and then civilization is going to collapse.”

Elon Musk isn’t precisely a nature-lover. He’s an ambitious engineer who wants to conquer the galaxy. Practically speaking, if you want to colonize other planets, you have to quit destroying yourself first. How? You start by identifying the problem.

Humans are using limited resources, which means that we will run out of energy sooner or later. Simultaneously, when we burn fossil fuels, we heat and pollute our environment in a deadly way. The solution? Sustainable energy, which Musk spelled T.E.S.L.A.

The controversial entrepreneur bet everything on electric cars because transportation is one of the hardest activities to decarbonize. The same risky gamble that almost sunk him in bankruptcy later made him the richest man alive, or the second.

Either way, Tesla grew so big that it’d soon require the entire world’s supply of rechargeable batteries. To match the projected demand, Musk built Gigafactories that accelerated the manufacture of his electric tech. As a result, costs will decrease, and so will the prices, which, in turn, will translate into more sales.

In short, Musk’s approach created an upward spiral that didn’t only lift Tesla. It also lifted the entire electric car industry in many ways. Below, you’ll find the main two.

Musk encouraged the stubborn carmaking giants to take the green leap

“Every board of every automaker has watched the Tesla share run,” said Daniel Ives, who is a technology analyst at Wedbush Securities. “Maybe they were skeptical two years ago. But its performance since has cemented in the mind of every automaker that it has to go this way.”

To be precise, Tesla didn’t change the tendency; it accelerated the inevitable. For decades, scientists have warned of the dangers of carbon emissions, but carmakers didn’t seem to listen. They didn’t want to invest in new techs when gasoline cars have always been profitable. Tesla’s financial success changed that.

All of a sudden, Volkswagen plans to launch 70 pure electric designs by 2030, and General Motors projects to sell emission-free cars only by 2035. So, while the world has struggled to push the car industry into electrification, Tesla pulled it in within two years. It also embarked newcomers, which brings us to the second point.

Tesla triggered an explosion of eco-friendly transportation startups

Many of the entrepreneurs who are shining in the electric car industry drew inspiration from Musk. Take Peter Rawlinson, who is a former chief engineer at Tesla and now CEO of Lucid Motors. “Tesla can’t do it alone,” Rawlinson said. “[It] needs some competition.”

Tesla’s competition isn’t limited to ex-employees who now make their own cars, though. Innovations like Rivian’s electric vans and Infinium’s fuel replacements brought new solutions that convinced big names like Amazon and Mitsubishi.

Looking at these developments, it’s no surprise that market studies look promising. Boston Consulting Group predicted that electrified vehicles would seize 51% of the market by 2030. Consequently, the charging station market is expected to grow 15 times during the same period.

In particular, 2021 promises to be a significant turning point for the industry. “There’s pent-up demand for electric vehicles,” explained Sam Jaffe, managing director of Cairn Energy Research Advisors. “We will see a combination of factors make 2021 an inflection point for the sale of electric vehicles.”

It’s safe to say the automotive industry’s future looks rather electric. And thanks to Tesla, it has already started to roll.

Decision-Making | Business | Technology — That’s what I write about when I’m not daydreaming about food— Come say hi on LinkedIn ➡

Thanks to Maria Milojković, MA

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