It’s the same reasons that electric cars have been unsuccessful for the past two decades. But as the cost of oil has continued to rise in the face of increased global demand (and constrained global supply,) as well as improvements in battery technology, the balance has begun to shift a little. However, there’s really one key reason that the major auto companies have failed at making a reliable, high-performing electric car: the wrong approach to battery design.
Simply put, a high-voltage battery in an auto is exposed to constant extremes in temperature, heavy vibration, inconsistent charging; in short the inverse of an optimal living situation. And where automakers have failed is by trying to “over-engineer” an automotive-grade battery that could live up to the environmental toll. However, Tesla Motors Inc (NASDAQ:TSLA), led by Musk’s intuition, chose to accept that failure was an expected outcome, and a better approach was to design a system that limited the environmental extremes, while also “diversifying the risk” by spreading the needed battery capacity over many more, smaller cells (of a standard commercial type,) versus the fewer, larger cells being utilized by the traditional manufacturers. The outcome of this critical engineering design is:
–Controlling the climate of these “pods of cells” is more efficient
–Battery cell failure has a much smaller impact on overall charge capacity
–Maintenance and repair costs will be lower versus high-cost, larger cells
–Increased flexibility for where the cells can fit in the vehicle increase design flexibility
In a nutshell, this one, simple solution, in and of itself is just a small part of the whole, is an indication that thinking “outside the norms” actually is the norm for Tesla Motors Inc (NASDAQ:TSLA). And that culture is part of what will lead to the first new successful automobile manufacturer in the US in over six decades.
And while it’s not a public company yet, Musk’s SpaceX is rumored to be going public at some point, and worth putting on your “watch list.” Already the “low cost leader” in getting goods to space, once the currently in-testing “Grasshopper” reusable rocket project becomes a reality, the cost of space travel and exploration will drop significantly. Which is important if Musk’s dream of “dying on Mars, just not on impact” is to become a reality.
Building the future, in space and on Mother Earth
There has been much speculation and emotion around so-called 3D printing or “additive manufacturing” over the past year. And depending on what you believe, either 3D Systems (NYSE:DDD)’ technology is old and over hyped, or it’s going to change manufacturing as we know it. But the truth is actually somewhere in the middle, and where the technology will take us is a little bit of an unknown. However, here’s an interesting picture of how it could realistically play out:
Hypothetically, let’s say NASA decides that it’s going to put people on Mars in a decade. One of the real risks of being on Mars is exposure. With a thin atmosphere and no magnetic shield, radiation levels are much higher than they are on Earth. So SpaceX teams up with 3D systems to launch a robotic “additive manufacturing plant” to Mars, that’s able to manufacture buildings, and assemble them, essentially complete and ready for occupation before a single Astronaut puts a boot on red Martian soil. It’s not that far off from being plausible.
The basic technology already exists, and is being used today to build all kinds of advanced items from various materials ranging from plastics to titanium to human tissues.
I hope this isn’t an investing thesis
Not entirely, obviously, but think back to how things were done a century ago versus today. The microwave oven is a good place to start. Or better yet-that 60 inch TV on your living room wall, that’s less than an inch thick. You know, the one that makes the display screens from Star Trek look dated?
Source: Memory Alpha
Foolish bottom line
As much as the futuristic thoughts above are a little outlandish, it’s important to remember that exact prediction is something we are essentially terrible at. However, analyzing businesses, and picking a diverse selection to invest in, has a century-long track record of success. I hope you’ve gained some ideas from this article. Now it’s up to you to do your homework and see if these companies fit in your portfolio. I can promise that they all fit in mine.
The article Self-Driving Electric Robot Cars! That Build Themselves! In Space! originally appeared on Fool.com and is written by Jason Hall.
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